PROTECTIONISM 


THE  -ISM    WHICH    TEACHES    THAT    WASTE 
MAKES    WEALTH 


WILLIAM    GRAHAM   SUMNER 

i 

Professor  of  Political  and  Social  Science  in   Yale  College 


NEW  YORK 
HENRY  HOLT  AND  COMPANY 

1 8  83 


COPYRIGHT,  1885, 

BY 
HENRY  HOLT  &  CO 


W.  L.  MERSHON  &  Co., 

Printers    and    Electrotypers. 

RAH  WAY,  N.  J. 


//  is   with  pleasure  that  I  place  here  the  name  of  a 

gentleman   to   whom   the   cause    of  free-trade 

in  the    United    States   is   under 

heavy  obligations 
MR.    THOMAS  HOLLAND, 


PREFACE. 

During  the  last  fifteen  years  we  have  had  two 
great  questions  to  discuss:  the  restoration  of  the 
currency,  and  civil-service  reform.  Neither  of 
these  questions  has  yet  reached  a  satisfactory  so- 
lution, but  both  are  in  the  way  toward  such  a 
result.  The  next  great  effort  to  strip  off  the 
evils  entailed  on  us  by  the  civil  war  will  consist 
in  the  repeal  of  those  taxes  which  one  man  was 
enabled  to  levy  on  another,  under  cover  of  the 
taxes  which  the  government  had  to  lay  to  carry 
on  the  war.  I  have  taken  my  share  in  the  dis- 
cussion of  the  first  two  questions,  and  I  expect 
to  take  my  share  in  the  discussion  of  the  third. 

I  have  written  this  book  as  a  contribution  to  a 
popular  agitation.  I  have  not  troubled  myself 
to  keep  or  to  throw  off  scientific  or  professional 
dignity.  I  have  tried  to  make  my  point  as  di- 
rectly and  effectively  as  I  could  for  the  readers 
whom  I  address,  viz.,  the  intelligent  voters  of  all 


vi  PREFACE. 

degrees  of  general  culture,  who  need  to  have  it 
explained  to  them  what  protectionism  is  and  how 
it  works.  I  have  therefore  pushed  the  contro- 
versy just  as  hard  as  I  could,  and  have  used  plain 
language,  just  as  I  have  always  done  before  in 
what  I  have  written  on  this  subject.  I  must 
therefore  forego  the  hope  that  I  have  given  any 
more  pleasure  now  than  formerly  to  the  advocates 
of  protectionism. 

Protectionism  seems  to  me  to  deserve  only  con- 
tempt and  scorn,  satire  and  ridicule.  It  is  such 
an  arrant  piece  of  economic  quackery,  and  it 
masquerades  under  such  an  affectation  of  learning 
and  philosophy,  that  it  ought  to  be  treated  as 
other  quackeries  are  treated.  Still,  out  of  defer- 
ence to  its  strength  in  the  traditions  and  lack  of 
information  of  many  people,  I  have  here  under- 
taken a  patient  and  serious  exposition  of  it. 
Satire  and  derision  remain  reserved  for  the  dog- 
matic protectionists  and  the  sentimental  protec- 
tionists; the  Philistine  protectionists  and  those  who 
hold  the  key  of  all  knowledge ;  the  protection- 
ists of  stupid  good  faith,  and  those  who  know  their 
dogma  is  a  humbug  and  are  therefore  irritated  at 
the  exposure  of  it ;  the  protectionists  by  birth 


PREFACE.  vii 

and  those  by  adoption  ;  the  protectionists  for 
hire  and  those  by  election  ;  the  protectionists  by 
party  platform  and  those  by  pet  newspaper  ;  the 
protectionists  by  "  invincible  ignorance,"  and 
those  by  vows  and  ordination  ;  the  protectionists 
who  run  colleges,  and  those  who  want  to  burn 
colleges  down  ;  the  protectionists  by  investment 
and  those  who  sin  against  light ;  the  hopeless 
ones  who  really  believe  in  British  gold  and  dread 
the  Cobden  Club,  and  the  dishonest  ones  who 
storm  about  those  things  without  believing  in 
them  ;  those  who  may  not  be  answered  when 
they  come  into  debate,  because  they  are  "great  " 
men,  or  because  they  are  "old  "  men,  or  because 
they  have  stock  in  certain  newspapers,  or  are 
trustees  of  certain  colleges.  All  these  have  hon- 
ored me  personally,  in  this  controversy,  with  more 
or  less  of  their  particular  attention.  I  confess 
that  it  has  cost  me  something  to  leave  their  cases 
out  of  account,  but  to  deal  with  them  would  have 
been  a  work  of  entertainment,  not  of  utility. 

Protectionism  arouses  my  moral  indignation. 
It  is  a  subtle,  cruel,  and  unjust  invasion  of  one 
man's  rights  by  another.  It  is  done  by  force  of 
law.  It  is  at  the  same  time  a  social  abuse,  an 


viii  PREFACE. 

economic  blunder,  and  a  political  evil.  The  moral 
indignation  which  it  causes  is  the  motive  which 
draws  me  away  from  the  scientific  pursuits  which 
form  my  real  occupation,  and  forces  me  to  take  part 
in  a  popular  agitation.  The  doctrine  of  a  "  call  " 
applies  in  such  a  case,  and  every  man  is  bound  to 
take  just  so  great  a  share  as  falls  in  his  way. 
That  is  why  I  have  given  more  time  than  I  could 
afford  to  popular  lectures  on  this  subject,  and  it 
is  why  I  have  now  put  the  substance  of  those 
lectures  into  this  book. 

W.  G.  S. 


CONTENTS. 


PAGE 

CHAPTER  I. — DEFINITIONS. — STATEMENT  OF  THE  QUES- 
TION TO  BE  INVESTIGATED i 

(a.)  The  system  of  which  protectionism  is  a  survival         .  I 

(^.)  Old  and  new  conceptions  of  the  state          ...  4 

(c.)  Definition  of  protectionism  and  of  theory  ...  9 

(d.)  Definition  of  free  trade  and  of  a  protective  duty        .  16 

(e.)   Protectionism  raises  a  purely  domestic  controversy     .  17 

(/.)  "A  tariff  is  not  a  tax" 18 

CHAPTER  II. — PROTECTIONISM   EXAMINED  ON  ITS  OWN 

GROUNDS 24 

(a.)  Assumptions  of  protectionism    .         .         .  25 
(&.)  Necessary  conditions  of  successful   protective   legis- 
lation                                   27 

(c.)   Examination  of  the  means  proposed,  i.  e.,  taxes         .       34 

(d.)  The  plan  of  mutual  taxation 37 

(e.)   The  proposal  to  create  an  industry     >^  .         .         .41 
^(y.)  The  proposal  to  develop  natural  resources    „  .49 

(£.)  The  proposal  to  raise  wages  [^.         .         .         .         .54 
'    (//.)  The   prevention   of   competition   by    foreign   pauper 

labor 59 

(i.)    The  proposal  to  raise  the  standard  of  comfort  .         .       60 

CHAPTER  III. — PROTECTIONISM  EXAMINED   ADVERSELY. 

I.  Protectionism  is  hostile  to  trade     .         .         .         .       67 

(a.)  Rules  for  safe  trade  .         .         .         .         .         .         .67 

(3.)  Economic  units  not  national  units       ....       70 


x  CONTENTS. 

PAGfe 

2.  Protectionism  at  war  with  improvement         .         .  75 
(a.)  Taxes  to  offset  cheapened  transportation   ...  76 
(/>.)  Sugar  bounties  ........  80 

(c.)   Forced  foreign   relations  to   regulate   improvements 

which  can  no  longer  be  defeated    .         .         .         .91 

3.  Protection  lowers  wages         .         .         .         .         .97 
(a.)  No  true  wages-class  in  the  United  States  ...       98 
(b.)  How  taxes  do  act  on  wages       .         .         .         .         .104 
(c.)   Perils  of  statistics,  especially  of  wages       .         .         .107 

4.  Protectionism  is  socialism      .         .         .          .          .ill 

CHAPTER  IV. — SUNDRY  FALLACIES  OF  PROTECTIONISM    .     114 

(a.)  Infant  industries 114. 

(b.)  Protection  lowers  prices     .         .          .         .         .         .117 

(c.)    Danger  of  becoming  purely  agricultural     .         .         .119 
(d.)  Connection  of  manufactures  and  prosperity         .         .     121 
(e.)   Diversification  of  industry          .         .         .         .         .122 

(f.)  Manufactures  give  value  to  land         .         .         .          '123 

(g.)  The  truck-farm  argument 125 

(h.)  Farmers  are  saved  from  competition  .  .  .  .127 
(i.)  Without  protection — no  industries  .  .  .  .130 
(/.)  Protection  offers  variety  of  employment  .  *  .134 

(k.)  Independence   ..'•', 134 

(/.)  Salvation  from  foreign  monopoly  .  .  .  .136 
(m.)  Free  trade  good  in  theory  but  not  in  practice  .  .  137 
(w.)  Trade  is  war 139 

•    (0.)    Employment  for  idle  labor  and*  capital       .         .         .     140 
(/.)  Young  nations  need  protection  .          .         .         .         .141 

(g.)  The  war  argument    .         .         .         .         .         .         .142 

(r.)  Great  moral  development  of  the  nation  by  protection     143 

"'•(j.)   Losing  as  consumers  and  winning  as  producers  .         .     147 

(f.)   That  the  foreign  producer  pays  for  protection    .         .     149 

CHAPTER  V. — SUMMARY  AND  CONCLUSION         .        .        .156 


PROTECTIONISM. 


CHAPTER   I. 

DEFINITIONS:     STATEMENT    OF    THE   QUESTION 
TO   BE   INVESTIGATED, 

A)  The  System  of  which  Protection  is  a  Survival. 

i.  The  statesmen  of  the  eighteenth  century  sup- 
posed that  their  business  was  the  art  of  national 
prosperity.  Their  procedure  was  to  form  ideals  of 
political  greatness  and  civil  prosperity  on  the  one 
hand,  and  to  evolve  out  of  their  own  consciousness 
grand  dogmas  of  human  happiness  and  social 
welfare  on  the  other  hand.  Then  they  tried  to 
devise  specific  means  for  connecting  these  two 
notions  with  each  other.  Their  ideals  of  political 
greatness  contained,  as  predominant  elements,  a 
brilliant  court,  a  refined  and  elegant  aristocracy, 
well  developed  fine  arts  and  belles  lettres,  a  power, 
ful  army  and  navy,  and  a  peaceful,  obedient  and 


hard  working  peasantry  and  artisan  class  to  pay 
the  taxes  and*  support'  the  other  part  of  the  polit- 
ical structure.     In  this  ideal  the  lower  ranks  paid 
upward,  and  the  upper  ranks  blessed  downward, 
and  all  were  happy  together.     The  great  political 
and  social  dogmas  of  the  period  were  exotic  and  in- 
congruous.    They  were  borrowed  or  accepted  from 
the  classical  authorities.     Of  course  the  dogmas 
were  chiefly  held  and  taught  by  the  philosophers, 
but,  as  the  century  ran  its  course,  they  penetrated 
the  statesman  class.     The  statesman  who  had  had 
no  purpose  save  to  serve  the   "  grandeur "  of  the 
king,  or  to  perpetuate  a  dynasty,  gave  way  to 
statesmen  who  had  strong  national   feeling  and 
national  ideals,  and  who  eagerly  sought  means  to 
realize  their  ideals.      Having  as   yet  no  definite 
notion,  based  on  facts  of  observation  and  experi- 
ence, of  what  a  human  society  or  a  nation  is,  and 
no  adequate  knowledge  of  the  nature  and  opera- 
tion of  social  forces,  they  were  driven  to  empirical 
processes  which  they  could  not  test,  or  measure, 
or  verify.     They  piled  device  upon  device  and  fail- 
ure upon  failure.     When  one  device  failed  of  its 
intended  purpose  and  produced  an  unforeseen  evil, 
they  invented  a  new  device  to  prevent  the  new 


THE  ART  OF  PROSPERITY.  3 

evil.  The  new  device  again  failed  to  prevent,  and 
became  a  cause  of  a  new  harm,  and  so  on  indefi- 
nitely. 

2.  Among  their  devices  for  industrial  pros- 
perity were  (i)  export  taxes  on  raw  materials,  to 
make  raw  materials  abundant  and  cheap  at  home  ; 
(2)  bounties  on  the  export  of  finished  products, 
to  make  the  exports  large  ;  (3)  taxes  on  imported 
commodities  to  make  the  imports  small,  and  thus, 
with  No.  2,  to  make  the  "  balance  of  trade  "  fa- 
vorable, and  to  secure  an  importation  of  specie  ;  (4) 
taxes  or  prohibition  on  the  export  of  machinery, 
so  as  not  to  let  foreigners  have  the  advantage  of 
domestic  inventions  ;  (5)  prohibition  on  the  emi- 
gration of  skilled  laborers,  lest  they  should  carry 
to  foreign  rivals  knowledge  of  domestic  arts ;  (6) 
monopolies  to  encourage  enterprise  ;  (7)  naviga- 
tion laws  to  foster  ship-building  or  the  carrying 
trade,  and  to  provide  sailors  for  the  navy  ;  (8)  a 
colonial  system  to  bring  about  by  political  force 
the  very  trade  which  the  other  devices  had 
destroyed  by  economic  interference  ;  (9)  laws  for 
fixing  wages  and  prices  to  repress  the  struggle  of 
the  non-capitalist  class  to  save  themselves  in  the 
social  press  ;  (10)  poor-laws  to  lessen  the  struggle 


4  PROTECTIONISM. 

by  another  outlet ;  (n)  extravagant  criminal  laws 
to  try  to  suppress  another  development  of,,  this 
struggle  by  terror  ;  and  so  on,  and  so  on. 

J5.)  Old  and  Neiv  Conceptions  of  the  State. 

3.  Here  we  have  a  complete  illustration  of  one 
mode  of  looking  at  human  society,  or  at  a  state. 
Such  society  is,  on  this  view,  an  artificial  or 
mechanical  product.  It  is  an  object  to  be 
molded,  made,  produced  by  contrivance.  Like 
every  product  which  is  brought  out  by  working 
up  to  an  ideal  instead  of  working  out  from  antece- 
dent truth  and  fact,  the  product  here  is  hap  haz- 
ard, grotesque,  false.  Like  every  other  product 
which  is  brought  out  by  working  on  lines  fixed 
by  h  priori  assumptions,  it  is  a  satire  on  human 
foresight  and  on  what  we  call  common  sense. 
Such  a  state  is  like  a  house  of  cards,  built  up 
anxiously  one  upon  another,  ready  to  fall  at  a 
breath,  to  be  credited  at  most  with  naive  hope 
and  silly  confidence ;  or,  it  is  like  the  long  and 
tedious  contrivance  of  a  mischievous  school-boy, 
for  an  end  which  has  been  entirely  mis-appreci- 
ated and  was  thought  desirable  when  it  should 
have  been  thought  a  folly ;  or,  it  is  like  the  mu- 


WHA  T  A  STA  TE  IS.  5 

seum  of  an  alchemist,  filled  with  specimens  of  his 
failures,  monuments  of  mistaken  industry  and 
testimony  of  an  erroneous  method ;  or,  it  is  like 
the  clumsy  product  of  an  untrained  inventor,  who, 
instead  of  asking  "  what  means  have  I,  and  to 
what  will  they  serve  ?  "  asks  :  "  what  do  I  wish 
that  I  could  accomplish  ?  "  and  seeks  to  win  steps 
by  putting  in  more  levers  and  cogs,  increasing 
friction  and  putting  the  solution  ever  further  off. 
4.  Of  course  such  a  notion  of  a  state  is  at  war 
with  the  conception  of  a  state  as  a  seat  of  origi- 
nal forces  which  must  be  reckoned  with  all  the 
time  ;  as  an  organism  whose  life  will  go  on  any 
how,  perverted,  distorted,  diseased,  vitiated  as  it 
may  be  by  obstructions  or  coercions ;  as  a  seat  of 
life  in  which  nothing  is  ever  lost,  but  every  ante- 
cedent combines  with  every  other  and  has  its 
share  in  the  immediate  resultant,  arid  agajn  in  the 
next  resultant,  and  so  on  indefinitely;  as  the 
domain  of  activities  so  great  that  they  should 
appall  any  one  who  dares  to  interfere  with  them  ; 
of  instincts  so  delicate  and  self-preservative  that 
it  should  be  only  infinite  delight  to  the  wisest  man 
to  see  them  come  into  play,  and  his  sufficient 
glory  to  give  them  a  little  intelligent  assistance. 


PROTECTIONISM. 


a  state  well  performed  its  functions  of  provid- 
ing peace,  order  and  security,  as  conditions  under 

"  which  the  people  could  live  and  work,  it  would  be 

'the  proudest  proof  of  its  triumphant  success  that 
it  had  nothing  to  do—  that  all  went  so  smoothly 
that  it  had  only  to  look  on  and  was  never  called  to 
interfere  ;  just  as  it  is  the  test  of  a  good  business 
man  that  his  business  runs  on  smoothly  and 
prosperously  while  he  is  not  harassed  or  hurried. 

^The  people  who  think  that  it  is  proof  of  enter- 
prise  to  meddle  and  "fuss  "may  believe  that  a 
good  state  will  constantly  interfere  and  regulate, 
and  they  may  regard  the  other  type  of  state  as 

*'"  non-government."  The  state  can  do  a  great  deal 
more  than  to  discharge  police  functions.  If  it  will 
follow  custom,  and  the  growth  of  social  structure 
'to  provide  for  new  social  needs,  it  can  powerfully 

*  aid  the  production  of  structure  by  laying  down 
lines  of  common  action,  where  nothing  is  needed 
but  some  common  action  on  conventional  lines  ;  or, 

y 

it  can  systematize  a  number  of  arrangements 
which  are  not  at  their  maximum  utility  for  want 
of  concord;  or,  it  can  give  sanction  to  new  rights 
which  are  constantly  created  by  new  relations 
*under  new  social  organizations,  and  so  on. 


STA  TESMEN.  J 

5.  The  latter  idea  of  the  state  has  only  begun 
to  win  way.  All  history  and  sociology  bear  wit- 
ness to  its  comparative  truth,  at  least  when  com- 
pared with  the  former.  Under  the  new  concep- 
tion of  the  state,  of  course  liberty  means  break- 
ing off  the  fetters  and  trammels  which  the 
"  wisdom  "  of  the  past  has  forged,  and  laisscz 
faire,  or  "  let  alone,"  becomes  a  cardinal  maxim 
of  statesmanship,  because  it  means,  "Cease  the 
empirical  process.  Institute  the  scientific  process. 
Let  the  state  come  back  to  normal  health  and 
activity,  so  that  you  can  study  it,  learn  something 
about  it  from  an  observation  of  its  phenomena, 
and  then  regulate  your  action  in  regard  to  it  by 
intelligent  knowledge."  Statesmen  suited  to  this 
latter  type  of  state  have  not  yet  come  forward  in 
any  great  number.  The  new  radical  statesmen 
show  no  disposition  to  let  their  neighbors  alone. 
They  think  that  they  have  come  into  power  just 
because  they  know  what  their  neighbors  need  to 
have  done  to  them.  Statesmen  of  the  old  type, 
who  told  people  that  they  knew  how  to  make 
every  body  happy,  and  that  they  were  going  to  do 
it,  were  always  far  better  paid  than  any  of  the 
new  type  ever  will  be,  and  their  failures  never 


8  PROTECTIONISM. 

costthem  public  confidence  either.  We  have  got 
tired  of  kings,  priests,  nobles  and  soldiers,  not 
because  they  failed  to  make  us  all  happy,  but 
because  our  b  priori  dogmas  have  changed 
fashion.  We  have  put  the  administration  of 
the  state  in  the  hands  of  lawyers,  editors, 
litterateurs  and  professional  politicians,  and 
they  are  by  no  means  disposed  to  abdicate  the 
functions  of  their  predecessors,  or  to  aban- 
don the  practice  of  the  art  of  national  pros- 
perity. The  chief  difference  is  that,  whereas 
the  old  statesmen  used  to  temper  the  practice 
of  their  art  with  care  for  the  interests  of  the 
kings  and  aristocracies  which  put  them  in  power, 
the  new  statesmen  feel  bound  to  serve  those 
sections  of  the  population  which  have  put  them 
where  they  are. 

6.  Some  of  the  old  devices  above  enumerated 
<(§  2)  are,  however,  out  of  date,  or  are  becoming 
-obsolete.*  Number  3,  taxes  on  imports  for  other 
than  fiscal  purposes,  is  not  among  this  number. 
Just  now  such  taxes  seem  to  be  coming  back  into 

*  February  4,  1884,  Mr.  Robinson  of  New  York  proposed,  in 
the  House  of  Representatives,  an  amendment  to  the  Constitution, 
so  as  to  allow  Congress  to  lay  an  export  duty  on  cotton  for  the 
encouragement  of  .home  manufactures.  (Record,  862). 


THE  -ISM  DEFINED.  9 

fashion,  of  to  be  enjoying  a  certain  revival.  It  is 
a  sign  of  the  deficiency  of  our  sociology  as  com- 
pared with  our  other  sciences  that  such  a  phe- 
nomenon could  be  presented  in  the  last  quarter  of 
the  nineteenth  century,  as  a  certain  revival  of 
faith  in  the  efficiency  of  taxes  on  imports  as  a 
device  for  producing  national  prosperity.  There 
is  not  a  single  one  of  the  eleven  devices  men- 
tioned above,  including  taxes  on  the  exportation 
of  machinery  and  prohibitions  on  emigration,.  / 
which  is  not  quite  as  rational  and  sound  as  taxes; 
on  imports. 

I    now  propose  to  analyze   and  criticise    pro- 
tectionism. 


C.)   Definition  of  Protectionism. — Definition    of 
"  Theory." 

7.  By  protection/^;;*  J^mean  the  doctrine  of 
protective  taxes  as  a  device  to  be  employed  in 
the  art  of  national  prosperity.  The  protectionists 
are  fond  of  representing  themselves  as  "  practical" 
and  the  free  traders  as  "  theorists."  Theory  is 
indeed  one  of  the  worst  abused  words  in  the 
language,  and  the  scientists  are  partly  to  blame 
for  it.  They  have  allowed  the  word  to  come  into 


1  o  PRO  TECTIOXISM. 

use,   even   among  themselves,   for   a   conjectural 
explanation,  or  a  speculative  conjecture,  or  a  zvork- 
ing  hypothesis,  or  a  project  which  has  not  yet  been 
tested  by  experiment,  or  a  plausible  and  harmless 
theorem  about  transcendental  relations,  or  about 
the  way   in   which   men   will   act   un^er    certain 
motives.     The  newspapers  seem  often  to  use  the 
word  theoretical  as  if  they  meant  by  it  imaginary 
or   fictitious.     I   use   the  word  theory,  however, 
not  in  distinction  from  fact,  but,  in  what  I  under- 
stand  to  be  the  correct  scientific  use  of  the  word, 
to   denote   a  rational  description   of  a  group  of 
coordinated  facts  in  their  sequence  and  relations. 
A  theory  may,  for  a  special    purpose,    describe 
only  certain  features  of  facts  and  disregard  others. 
Hence  "  in  practice,"  where  facts  present  them- 
selves in  all  their  complexity,  he  who  has  care- 
lessly neglected  the  limits  of  his  theory  may  be 
astonished  at    phenomena  which  present  them- 
selves,  but  his    astonishment  will  be  due   to   a 
blunder  on  his  part,  and  will  not  be  an  imputation 
on  the  theory. 

8.  Now  free  trade  is  not  a  theory  in  any  sense 
of  the  word.  It  is  only  a  mode  of  liberty ;  one 
form  of  the  assault  (and  therefore  negative)  which 


WHA  T  LIBER  TV  MEANS.  1 1 

the  expanding  intelligence  of  the  present  is 
making  on  the  trammels  which  it  has  inherited 
from  the  past.  Inside  the  United  States,  absolute 
free  trade  exists  over  a  continent.  No  one  thinks 
of  it  or  realizes  it.  No  one  " feels"  it.  We  feel 
only  constraint  and  oppression.  If  we  get  liberty 
we  reflect  on  it  only  so  long  as  the  memory  of 
constraint  endures.  I  have  again  and  again 
seen  the  astonishment  with  which  people  realized 
the  fact  when  presented  to  them  that  they  have 
been  living  under  free  trade  all  their  lives  and 
never  thought  of  it.  When  the  whole  \vorld  shall 
obtain  and  enjoy  free  trade  there  will  be  nothing 
more  to  be  said  about  it ;  it  will  disappear  from 
discussion  and  reflection ;  it  will  disappear  from 
the  text-books  on  political  economy  as  the  chap- 
ters on  slavery  are  disappearing ;  it  will  be  as 
strange  for  men  to  think  that  they  might  not  have 
free  trade  as  it  would  be  now  for  an  American  to 
think  that  he  might  not  travel  in  this  country 
without  a  passport,  or  that  there  ever  was  a 
chance  that  the  soil  of  our  western  states  might 
be  slave  soil  and  not  free  soil.  .It  wrould  be  as 
reasonable  to  apply  the  \vord  theory  to  the 
protestant  reformation,  or  to  law  reform,  or  to 


1 2  PRO  TECTIONISM  IS 

anti-slavery,  or  to  the  separation  of  church  and 
state,  or  to  popular  rights,  or  to  any  other  cam- 
paign in  the  great  struggle  which  we  call  liberty 
and  progress,  as  to  apply  it  to  free  trade.  The 
pro-slavery  men  formerly  did  apply  it  to  abolition, 
and  with  excellent  reason,  if  the  use  of  it  which  1 
have  criticised  ever  was  correct ;  for  it  required 
great  power  of  realizing  in  imagination  the  results 
of  social  change,  and  great  power  to  follow  and 
trust  abstract  reasoning,  for  any  man  bred  under 
slavery  to  realize,  in  advance  of  experiment,  the 
social  and  economic  gain  to  be  won— most  of  all 
for  the  whites^by  emancipation.  It  now  requires 
great  power  of  "  theoretical  conception"  for  people 
who  have  no  experience  of  the  separation  of 
church  and  state  to  realize  its  benefits  and  justice. 
Similar  observations  would  hold  true  of  all  simi- 
lar reforms.  Free  trade  is  a  revolt,  a  conflict,  a 
reform,  a  reaction  and  recuperation  of  the  body 
politic,  just  as  free  conscience,  free  worship,  free 
speech,  free  press,  and  free  soil  have  been.  It 
is  in  no  sense  a  theory. 

9.  Protectionism  is  not  a  theory  in  the  correct 
sense  of  the  term,  but  it  comes  under  some  of  the 
popular  and  incorrect  uses  of  the  word.  It  is 


WHAT  SORT  OF  A   THEORY?  13 

purely  dogmatic  and  a  priori.  It  is  desired  to 
attain  a  certain  object — wealth  and  national  pros- 
perity* Protective  taxes  are  proposed  as  a  means. 
It  must  be  assumed  that  there  is  some  connection 
between  protective  taxes  and  national  prosperity, 
some  relation  of  cause  and  effect,  some  sequence 
of  expended  energy  and  realized  product,  between 
protective  taxes  and  national  wealth.  If  then  by 
theory  we  mean  a  speculative  conjecture  as  to 
occult  relations  which  have  not  been  and  can  not 
be  traced  in  experience,  protection  would  be  a 
capital  example.  Another  and  parallel  example 
was  furnished  by  astrology,  which  assumed  a 
causal  relation  between  the  movements  of  the 
planets  and  the  fate  of  men,  and  built  up  quite  an 
art  of  soothsaying  on  this  assumption.  Another 
example,  paralleling  protectionism  in  another 
feature,  was  alchemy,  which,  accepting  as  unques- 
tionable the  notion  that  we  want  to  transmute 
lead  into  gold  if  we  can,  assumed  that  there  was 
a  philosopher's  stone,  and  set  to  work  to  find  it 
through  centuries  of  repetition  of  the  method  of 
"  trial  and  failure. "^-*-  — 

10.  Protectionism  then  is  an  ISM,  that  is,  it  is   ar 

doctrine  or  system   of   doctrifte  -which    offers   no 

»  ^^^  ~ «—  <  i  — .  -,^^_ 


14  PROTECTIONISM. 

demonstration,  and  rests  upon  no  facts,  but 
appeals  to  faith  on  grounds  of  its  a  priori  reason- 
ableness, or  the  plausibility  with  which  it  can  be 
set  forth.  Of  course,  if  a  man  should  say :  "  I  am 
in  favor  of  protective  taxes  because  they  bring 
gain  to  me.  That  is  all  I  care  to  know  about  them, 
and  I  shall  get  them  retained  as  long  as  I  can  ;  " — 
there  is  no  trouble  in  understanding  him,  and 
there  is  no  use  in  arguing  with  him.  So  far  as  he  is 
concerned,  the  only  thing  to  do  is  to  find  his  vic- 
tims and  explain  the  matter  to  them.  The  only 
thing  which  can  be  discussed  is  the  doctrine  of 
national  wealth  by  protective  taxes.  This  doctrine 
has  the  forms  of  an  economic  theory.  It  vies  with 
the  doctrine  of  labor  and  capital  as  a  part  of  the 
science  of  production.  Its  avowed  purpose  is  im- 
personal and  disinterested, — the  same,  in  fact,  as 
that  of  political  economy.  It  is  not,  like  free 
trade,  a  mere  negative  position  against  an  inheri- 
ted system,  to  which  one  is  led  by  a  study  of 
political  economy.  It  is  a  species  of  political 
economy,  and  aims  at  the  throne  of  the  science 
itself.  If  it  is  true,  it  is  not  a  corollary,  but  a 
postulate,  on  which,  and  by  which,  all  political 
economy  must  be  constructed. 


DOGMA  AND  SCIENCE.  15 

II.  But  then,  lo  !  if  the  dogma  which  consti- 
tutes protectionism — national  wealth  can  be 
produced  by  protective  taxes  and  can  not  be  pro- 
duced without  them — is  enunciated,  instead  of 
going  on  to  a  science  of  political  economy  based 
upon  it,  the  science  falls  dead  on  the  spot.  What 
can  be  said  about  production,  population,  land, 
money,  exchange,  labor  and  all  the  rest  ?  What 
can  the  economist  learn  or  do?  What  function  is 
there  for  the  university  or  school  ?  There  is 
nothing  to  do  but  to  go  over  to  the  art  of  legisla- 
tion, and  get  the  legislator  to  put  on  the  taxes. 
The  only  questions  which  can  arise  are  as  to  the 
number,  variety,  size  and  proportion  of  the  taxes. 
As  to  these  questions  the  economist  can  offer  no 
light.  He  has  no  method  of  investigating  them. 
He  can  deduce  no  principles,  lay  down  no  laws  in 
regard  to  them.  The  legislator  must  go  on  in  the 
dark  and  experiment.  If  his  taxes  do  not  pro- 
duce the  required  result,  if  there  turn  out  to  be 
"snakes**  in  the  tariff  which  he  has  adopted,  he 
has  to  change  it.  If  the  result  still  fails,  change  it 
again.  Protectionism  bars  the  science  of  political 
economy  with  a  dogma,  and  the  only  process  of 
the  art  of  statesmanship  to  which  it  leads  is  eter- 


\f 


16  PROTECTIONISM. 

nal  trial  and  failure—  the  process  of   the  alchem- 
ist and  of  the  inventor  of  perpetual  motion. 

D,)  Definition  of  Free  Trade  and  of  a  Protective 
Duty. 

12.  What  then  is  a  protective  tax?  In  order 
to  join  issue  as  directly  as  possible,  I  will  quote 
the  definition  given  by  a  leading  protectionist 
journal,*  of  both  free  trade  and  protection.  "  The! 
term  free  trade,  although  much  discussed,  is  sel- 
dom rightly  defined.  It  does  not  mean  the  aboli- 
tion of  custom  houses.  Nor  does  it  mean  the 
substitution  of  direct  for  indirect  taxation,  as  a 
few  American  disciples  of  the  school  have  sup- 
posed.  It  means  such  an  adjustment  of  taxes  on 
imports  as  will  cause  no  diversion  of  capital, 
from  any  channel  into  which  it  would  otherwise 
.flow,  into  any  channel  opened  or  favored  by  the 
legislation  which  enacts  the  customs.  A  country 
may  collect  its  entire  revenue  by  duties  on  im- 
ports, and  yet  be  an  entirely  free  trade  country,  so 
long  as  it  does  not  lay  those  duties  in  such  a  way 
as  to  lead  any  one  to  undertake  any  employment, 
or  make  any  investment  he  would  avoid  in  the 

*  Philadelphia  American,  August  7,  1884. 


WHA  T  A  PROTECTIVE  DUTY  IS.  17 

absence  of  such  duties  :  thus,  the  customs  duties 
levied  by  England — with  a  very  few  exceptions — 
are  not  inconsistent  with  her  profession  of  being 
a  country  which  believes  in  free  trade.  They 
either  are  duties  on  articles  not  produced  in  En- 
gland, or  they  are  exactly  equivalent  to  the  excise 
duties  levied  on  the  same  articles  if  made  at  home* 
They  do  not  lead  any  one  to  put  his  money  into 
the  home  production  of  an  article,  because  they  do 
not  discriminate  in  favor  of  the  home  producer."  » 

13.  "  A  protective  duty,  on  the  other  hand,  has 
for  its  object  to  effect  the  diversion  of  a  part  of  the  1 
capital  and  labor  of  the  people  out  of  the  channels 
in  which   it   would    run  otherwise,   into  channelsj 
favored  or  created  by  law/' 

I  know  of  no  definitions  of  these  two  things 
which  have  ever  been  made  by  any  body  which 
are  more  correct  than  these.  I  accept  them  and 
join  issue  on  them. 

E.)    Protectionism    liaises   a    Purely  Domestic 
Controversy. 

14.  It  will  be  noticed  that  this  definition  of  a  pro- 
tective duty  says  nothing  about  foreigners  or  about 
imports.     According  to  this  definition,  a  protect- 
ive   duty  is  a  device  for  effecting  a  transforms- 


1 8  PROTECTIONISM. 

tion  in  our  own  industry.     If  a  taxislcvied  at  the 
port  of  entry  on  a  foreign  commodity  which  is 

actually  imported,  the  tax  is  paid  to  the  treasury 

•^ 
and  produces  revenue.     A  protective  tax  is  one 

which  is  laid  to  act  as  a  bar  to  importation,  in  or- 
der  to  keep  a  foreign  commodity  out.  It  does  not  act 
protectively  unless  it  does  act  as  a  bar,  and  is  not 
a  tax  on  imports  but  an  obstruction  to  imports. 
Hence  a  protective  duty  is  a  wall  to  inclose  the 
domestic  producer  and  consumer,  and  to  prevent 
the  latter  from  having  access  to  any  other  source 
of  supply  for  his  needs,  in  exchange  for  his  prod- 
ucts, than  that  one  which  the  domestic  producerj 
controls.  The  purpose  and  plan  of  the  device  is 
to  enable  the  domestic  producer  to  levy  on  the 
domestic  consumer  the  taxes  which  the  govern- 
ment has  set  up  as  a  barrier,  but  has  not  collected 
at  the  port  of  e,ntry.  Under  this  device  the  gov- 
ernment says  :  "  I  do  not  want  the  revenue,  but  I 
will  lay  the  tax  so  that  you,  the  selected  and 
favored  producer,  may  collect  it."  "I  do  not 
need  to  tax  the  consumer  for  myself,  but  I  will 
hold  him  for  you  while  you  tax  him." 

F.)    "  A  Protective  Duty  is  not  a  Tax." 
15.  There  are  some  who  say  that  "  a  tariff  is  not 


THE  BEST  JOKE.  19 

a  tax,"  or  as  one  of  them  said  before  a  Congres- 
sional Committee  :  "  We  do  not  like  to  call  it  so  ! " 
That  certainly  is  the  most  humorous  of  all  the 
funny  things  in  the  tariff  controversy.  If  a  tariff 
is  not  a  tax,  what  is  it  ?  In  what  category  does  it 
belong?  No  protectionist  has  ever  yet  told.  They 
seem  to  think  of  it  as  a  thing  by  itself,  a  Power,  a 
Force,  a  sort  of  Mumbo  Jumbo  whose  special 
function  it  is  to  produce  national  prosperity.  They 
do  not  appear  to  have  analyzed  it,  or  given  them- 
selves an  account  of  it,  sufficiently  to  know  what 
kind  of  a  thing  it  is  or  how  it  acts.  Any  one  who 
says  that  it  is  not  a  tax  must  suppose  that  it  costs 
nothing,  that  it  produces  an  effect  without  an  ex- 
penditure of  energy.  They  do  seem  to  think  that 
if  Congress  will  say  :  "  Let  a  tax  of  —  per  cent,  be 
laid  on  article  A,"  and  if  none  is  imported,  and 
therefore  no  tax  is  paid  at  the  custom  house, 
national  industry  will  be  benefited  and  wealth 
secured,  and  that  there  will  be  no  cost  or  outgo. 
If  that  is  so,  then  the  tariff  is  magic.  We  have 
found  the  philosopher's  stone.  Our  congressmen 
wave  a  magic  wand  over  the  country  and  say  : 
"  Not  otherwise  provided  for,  150  per  cent.,"  and, 
presto!  there  we  have  wealth.  Again  they  say: 


20  PROTECTIONISM. 

11  Fifty  cents  a  yard  and  fifty  percent,  ad  valorem;  " 
and  there  we  have  prosperity  !  If  we  should  build 
a  wall  along  the  coast  to  keep  foreigners  and  their 
goods  out,  it  would  cost  something.  If  we  main- 
tained a  navy  to  blockade  our  own  coast  for  the 
same  purpose,  it  would  cost  something.  Yet  it  is 
imagined  that  if  we  do  the  same  by  a  tax  it  costs 
nothing. 

1 6.  This  is  the  fundamental  fallacy  of  protection 
to  which  the  analysis  will  bring  us  back  again  and 
again.    Scientifically  stated  it  is  \\\?&  protectionism 
sins  against  the  conservation  of  energy.   More  simply 
stated  it  is  that  the  protectionist  either  never  sees  or 
does  not  tell  the  other  side  of  the  account,  the  cost, 
the  outlay  for  the  gains  which  he  alleges  from  pro- 
tection, and  that    when    these  are    examined   and 
weighed  they  are  sure  to  vastly  exceed  the  gains, 
if  the  gains  were  real,  even  taking  no  account  of 
the  harm  to  national  growth  which  is  done  by 
restriction  and  interference. 

17.  There  are  only  three  ways  in  which  a  man 
can  part  with  his  product,  and  different  kinds  of 
taxes   fall    under   different    modes    of    alienating 
one's  goods.     1st.   He  may  exchange  his  product 
for  the  product  of  others.     Then  he  parts  with 


A   TAX,    WHA  T  KIND  OF  OUTLA  Y.  21 

his  property  voluntarily,  and  for  an  equivalent. 
Taxes  which  are  paid  for  peace,  order  and  secur- 
ity, fall  under  this  head.  2d.  He  may  give  his 
product  away.  Then  he  parts  with  it  voluntarily 
without  an  equivalent.  Taxes  which  are  volun- 
tarily paid  for  schools,  libraries,  parks,  etc.,  etc., 
fall  under  this  head.  3d.  He  may  be  robbed  of 
it.  Then  he  parts  with  it  involuntarily  and  with- 
out an  equivalent.  Taxes  which  are  protective 
fall  under  this  head.  The  analysis  is  exhaustive, 
and  there  is  no  other  place  for  them.  Protective 
taxes  are  those  which  a  man  pays  to  his  neighbor 
to  hire  him  (the  neighbor)  to  carry  on  his  own 
business.  The  first  man  gets  no  equivalent  (§  108). 
Hence  any  one  who  says  that  a  tariff  is  not 
a  tax  would  have  to  put  it  in  some  such  category 
as  tribute,  plunder,  or  robbery.  In  order,  then, 
that  we  may  not  give  any  occasion  for  even  an 
unjust  charge  of  using  hard  words,  let  us  go  back 
and  call  it  a  tax. 

1 8.  In  any  case  it  is  plain  that  we  have  before  us 
the  case  of  two  Americans.  The  protectionists 
who  try  to  discuss  the  subject  always  go  off  to 
talk  English  politics  and  history,  or  Ireland,  or 
India,  or  Turkey.  I  shall  not  follow  them.  I 


22  PROTECTIONISM. 

shall  discuss  the  case  between  two  Americans, 
which  is  the  only  case  there  is.  Whether  English- 
men like  our  tariff  or  not  is  of  no  consequence. 
As  a  matter  of  fact,  Englishmen  seem  to  have  come 
to  the  opinion  that  if  Americans  will  take  their 
own  home  market  as  their  share,  and  will  keep  out 
of  the  world's  market,  they  (the  Englishmen)  will 
agree  to  the  arrangement ;  but  it  is  immaterial 
whether  they  agree,  or  are  angry.  The  only  ques- 
tion for  us  is :  What  kind  of  an  arrangement  is 
it  for  one  American  to  tax  another  American? 
How  does  it  work?  Who  gains  by  it?  How 
does  it  affect  our  national  prosperity?  These  and 
these  only  are  the  questions  which  I  intend  to 
discuss. 

19.  I  shall  adopt  two  different  lines  of  investiga- 
tion. First,  I  shall  examine  protectionism  on  its 
own  claims  and  pretensions,  taking  its  doctrines 
and  claims  for  true,  and  following  them  out  to  see 
whether  they  will  produce  the  promised  results  ; 
and  second,  I  shall  attack  protectionism  adversely, 
and  controversially.  If  anyone  proposes  a  device 
for  the  public  good,  he  is  entitled  to  candid  and 
patient  attention,  but  he  is  also  under  obligation 
to  show  how  he  expects  his  scheme  to  work, 


OBLIGA  TION  OF  THE  REFORMER  23 

what  forces  it  will  bring  into  play,  how  it  will  use 
them,  etc.  The  joint  stock  principle,  credit  insti- 
tutions, cooperation,  and  all  similar  devices  must 
be  analyzed  and  the  explanation  of  their  advan- 
tage, if  they  offer  any,  must  be  sought  in  the  prin- 
ciples which  they  embody,  the  forces  they  em- 
ploy, the  suitableness  of  their  apparatus.  We 
ought  not  to  put  faith  in  any  device  (e.  g.  bi-met- 
alism,  socialism)  unless  the  proposers  offer  an  ex- 
planation of  it  which  will  bear  rigid  and  pitiless 
examination  ;  for,  if  it  is  a  sound  device,  such  ex- 
amination will  only  produce  more  and  more 
thorough  conviction  of  its  merits.  I  shall  there- 
fore first  take  up  protectionism  just  as  it  is  offered, 
and  test  it,  as  any  candid  inquirer  might  do,  to 
see  whether,  as  it  is  presented  by  its  advocates,  it 
has  any  claims  to  confidence. 


CHAPTER  II. 

PROTECTIONISM  EXAMINED  ON  ITS  OWN  GROUNDS. 

f 

20.  It  is  the  peculiar  irony  in  all  empirical  de- 
vices in  social  science  that  they  not  only  fail  of 
the  effect  expected  of  them,  but  that  they  pro- 
duce the  exact  opposite.  Paper-money  is  expected 
to  help  the  non-capitalist  and  the  debtor  and  to 
make  business  brisk.  It  ruins  the  no/i-capitalists 
and  the  debtors,  and  reduces  industry  and  com- 
merce to  a  standstill.  Socialistic  devices  are  ex- 
pected to  bring  about  equality  and  universal  hap- 
piness. They  produce  despotism,  favoritism,  in- 
equality, and  universal  misery.  The  devices  are, 
in  their  operation,  true  to  themselves.  They  act 
just  as  an  unprejudiced  examination  of  them 
should  have  led  any  one  to  expect  that  they  would 
act,  or  just  as  a  limited  experience  has  shown  that 
they  must  act.  If  protectionism  is  only  another 
case  of  the  same  kind,  an  examination  of  it  on 
its  own  grounds  must  bring  out  the  fact  that  it 


THE  ASSUMPTIONS.  2$ 

will  issue  in  crippling  industry,  diminishing  capi- 
tal, and  lowering  the  average  of  comfort.  Let  us 
see. 

A.)  Assumptions  in  Protectionism. 

21.  Obviously  the  doctrine  includes  two  as- 
sumptions. /The  first  is,  that  if  we  are  left  to  our- 
selves, each  to  choose,  under  liberty,  his  line  of 
industrial  effort,  and  to  use  his  labor  and  capital, 
under  the  circumstances  of  the  country,  as  best 
he  can,  we  shall  fail  of  our  highest  prosperity. 
?  Second,  that,  if  Congress  will  only  tax  us  [prop- 
erly] we  can  be  led  up  to  higher  prosperity. 
Hence  it  is  at  once  evident  that  free  trade  and 
protection  here  are  not  on  a  level.  No  free  trader 
will  affirm  that  he  has  a  device  for  making  the 
country  rich,  or  saving  it  from  hard  times,  any 
more  than  a  respectable  physician  will  tell  us  that 
he  can  give  us  specifics  and  preventives  to  keep 
us  well.  On  the  contrary,  so  long  as  men  live, 
they  will  do  foolish  things,  and  they  will  have  to 
bear  the  penalty,  but  if  they  are  free,  they  will 
commit  only  the  follies  which  are  their  own,  and 
they  will  bear  the  penalties  only  of  those.  The 
protectionist  begins  with  the  premiss  that  we 


26  PROTECTIONISM. 

shall  make  mistakes,  and  that  is  why  he,  who 
knows  how  to  make  us  go  right,  proposes  to  take 
us  in  hand.  He  is  like  the  doctor  who  can  give 
us  just  the  pill  we  need  to  "  cleanse  our  blood  " 
and  "  ward  off  chills."  Hence  either  prosperity  in  a 
free  trade  country,  or  distress  in  a  protectionist 
country,  is  fatal  to  protectionism,  while  distress  in 
a  free  trade  country,  or  prosperity  in  a  protec- 
tionist country  proves  nothing  against  free  trade. 
Hence  the  fallacy  of  all  Mr.  R.  P.  Porter's  letters 
is  obvious.  (§§  52,  92,  102,  154.) 

22.  The  device  by  which  we  are  to  be  made 
better  than  ourselves  is  to  select  some  of  our- 
selves, who  certainly  are  not  the  best  business 
men  among  ourselves,  to  go  to  Washington,  and 
there  turn  around  and  tax  ourselves  blindly,  or, 
if  not  blindly,  craftily  and  selfishly.  Surely  this 
would  be  the  triumph  of  stupidity  and  ignorance 
over  intelligent  knowledge,  enterprise  and  energy. 
The  motive  which  would  control  each  of  us,  if  we 
were  free,  would  be  the  hope  of  the  greatest  gain. 
We  should  have  to  put  industry,  prudence,  econ- 
omy and  enterprise  into  our  business.  If  we 
failed,  it  would  be  through  error.  How  is  the 
congressional  interference  to  act?  How  is  it  to 


7 HE  CORRECTOR  OF  OUR  BLUNDERS.          27 

meet  and  correct  our  error?  It  can  appeal  to  no 
other  motive  than  desire  for  profit,  and  can  only 
offer  us  a  profit  where  there  was  none  before,  if 
we  will  turn  out  of  the  industry  which  we  have 
selected,  into  one  which  we  do  not  know.  It 
offers  a  greater  profit  there  only  by  means  of 
what  it  takes  from  somebody  else  and  some- 
where else.  Or,  is  congressional  interference  to 
correct  the  errors  of  John,  James  and  William, 
and  to  make  the  idle  industrious  and  the  extrav- 
agant prudent  ?  Any  one  who  believes  it  must 
believe  that  the  welfare  of  mankind  is  not  depend- 
ent on  the  reason  and  conscience  of  the  interested 
persons  themselves,  but  on  the  caprices  of  blun- 
dering ignorance,  embodied  in  a  selected  few,  or 
on  the  trickery  of  lobbyists,  acting  impersonally 
and  at  a  distance. 

B.)  Necessary  Conditions  of  Successful  Protective 
Legislation. 

23.  Suppose,  however,  that  it  were  true  that 
Congress  had  the  power  (by  some  exercise  of  the 
taxing  function)  to  influence  favorably  the  indus- 
trial development  of  the  country:  is  it  not  true 
that  men  of  sense  would  demand  to  be  satisfied 
on  three  points,  as  follows  ? 


a8  PROTECTIONISM. 

24  (a.)  If  Congress  can  do  this  thing,   and   is 
going  to  try  it,  ought  it  not,  in  order  to  succeed,  to 
have  a  distinct  idea  of  what  it  is  aiming  at  and 
proposes  to  do?     Who  would  have  confidence  in 
any  man  who  should  set  out  on  an  enterprise  and 
who  did  not  satisfy  this  condition  ?      Has  Con- 
gress ever  satisfied  it  ?     Never.     They  have  never 
had  any  plan  or  purpose  in  their  tariff  legislation. 
Congress  has  simply  laid   itself  open   to  be  acted 
upon  by  the  interested  parties,  and  the  product  of 
its  tariff  legislation  has  been  simply  the  resultant 
of  the  struggles  of  the  interested  cliques  with  each 
other,  and  of  the  log  rolling  combinations  which 
they  have  been  forced  to  make  among  themselves. 
In  1882  Congress  did  pay  some  deference,  real  or 
pretended,  to  the  plain  fact  that  it  was  bound,  if 
it  exercised  this  mighty  power  and  responsibility, 
to  bring  some  intelligence  to  bear  on  it,  and  it 
appointed  a  Tariff  Commission  which  spent  sev- 
eral  months  in  collecting  evidence.     This  Com- 
mission was  composed  of  protectionists  with  one 
exception.      It  recommended  a  reduction  of  25 
per  cent,  in  the  tariff,  and  said  :  "  Early  in  its  de- 
liberations  the    Commission   became    convinced 
that  a  substantial  reduction  of  tariff  duties  is  de- 


HO  W  CONGRESS  HELPS  US.  29 

manded,  not  by  a  mere  indiscriminate  popular 
clamor,  but  by  the  best  conservative  opinion  of 
the  country/'  "  Excessive  duties  are  positively 
injurious  to  the  interests  which  they  are  supposed 
to  benefit.  They  encourage  the  investment  of 
capital  in  manufacturing  enterprises  by  rash  and 
unskilled  speculators,  to  be  followed  by  disaster  to 
the  adventurers  and  their  employes,  and  a  pleth- 
ora of  commodities  which  deranges  the  opera- 
tions of  skilled  and  prudent  enterprise."  (§  in.) 
This  report  was  entirely  thrown  aside,  and  Con- 
gress, ignoring  it  entirely,  began  again  in  exactly 
the  old  way.  The  Act  of  1883  was  not  even 
framed  by  or  in  Congress.  It  was  carried  out 
into  the  dark,  into  a  conference  committee/ 
where  new  and  gross  abuses  were  put  into  the 
bill  under  cover  of  a  pretended  revision  and  re- 
duction. When  a  tariff  bill  is  before  Congress, 
the  first  draft  starts  with  a  certain  rate  on  a  cer- 
tain article,  say  20  per  cent.  It  is  raised  by 
amendment  to  50,  the  article  is  taken  into  a 
combination  and  the  rate  put  up. to  80  per  cent.  ; 
the  bill  is  sent  to  the  other  house,  and  the  rate  on 

*  Taussig  :   History  of  the  Existing  Tariff,  78  fg. 


3°  PROTECTIONISM. 

this  article  cut  down  again  to  40  per  cent. ;  on 
conference  between  the  two  houses  the  rate  is 
fixed  at  60  per  cent.  He  who  believes  in  the  pro- 
tectionist doctrine  must,  if  he  looks  on  at  that 
proceeding,  believe  that  the  prosperity  of  the 
country  is  being  kicked  around  the  floor  of  Con- 
gress, at  the  mercy  of  the  chances  which  are  at 
last  to  determine  with  what  per  cent,  of  tax  these 
articles  will  come  out.  And  what  is  it  that  de- 
termines with  what  tax  any  given  article  will 
come  out?  Any  intelligent  knowledge  of  indus- 
try ?  Not  a  word  of  it.  Nothing  in  the  case  of 
a  given  tax  on  a  given  article,  but  just  this: 
"  Who  is  behind  it?  "  The  history  of  tariff  legis- 
lation by  the  Congress  of  the  United  States, 
throws  a  light  upon  the  protective  doctrine  which 
is  partly  grotesque  and  partly  revolting. 

25  (b.)  If  Congress  can  exert  the  supposed 
beneficent  influence  on  industry,  ought  not  Con- 
gress to  understand  the  force  which  it  proposes  to 
use  ?  Ought  it  not  to  have  some  rules  of  protective 
legislation  so  as  to  know  in  what  cases,  within 
what  limits,  under  what  conditions,  the  device 
can  be  effectively  used?  Would  that  not  be  a 
reasonable  demand  to  make  of  any  man  who 


DISTRESS  WITHOUT  FREE  TRADE.  31 

should  propose  a  device  for  any  purpose?  Con- 
gress has  never  had  any  knowledge  of  the  way  in 
which  the  taxes  which  it  passed  were  to  do  this 
beneficent  work.  It  has  never  had,  and  has 
never  seemed  to  think  that  it  needed  to  get,  any 
knowledge  of  the  mode  of  operation  of  protective 
taxes.  It  passes  taxes,  as  big  as  the  conflicting 
interests  will  allow,  and  goes  home,  satisfied  that 
it  has  saved  the  country.  What  a  pity  that  phil- 
osophers, economists,  sages  and  moralists  should 
have  spent  so  much  time  in  elucidating  the  con- 
ditions and  laws  of  human  prosperity !  Taxes  can 
do  it  all. 

26  (c.)  If  Congress  can  do  what  is  affirmed  and 
is  going  to  try  it,  is  it  not  the  part  of  common 
sense  to  demand  tha&seme  tests  be  applied  to  the 
experiment  aftejr\  a/few  years  to  see  whether  it  is 


really  doing  as  was^expected  ?  In  the  campaign  of 
1880  it  was  said  that  iT~  Hancock  was  elected  we 
should  have  free  trade,  wages  would  fall,  factories 
would  be  closed,  etc.,  etc.  Hancock  was  not 
elected,  we  did  not  get  any  reform  of  the  tariff, 
and  yet  in  1884  wages  were  falling,  factories  were 
closed,  and  all  the  other  direful  consequences 
which  were  threatened  had  come  to  pass.  Brad- 


3  *  PRO  TECTIONISM. 

street's  made  investigations  in  the  winter  of  1884-5 
which  showed  that  316,000  workmen,  13  per  cent, 
of  the  number  employed  in  manufacturing  in 
1880,  were  out  of  work,  17,550  on  strike,  and  that 
wages  had  fallen  since  1882  from  10  to  40  per 
cent.,  especially  in  the  leading  lines  of  manufact- 
uring which  are  protected.  What  did  these 
calamities  all  prove  then?  If  we  had  had  any 
revision  of  the  tariff,  should  we  not  have  had 
these  things  alleged  again  and  again  as  results  of 
it  ?  Did  they  not  then,  in  the  actual  case,  prove 
the  folly  of  protection?  Oh!  no,  that  would  be 
attacking  the  sacred  dogma,  and  the  sacred  dogma 
is  a  matter  of  faith,  so  that,  as  it  never  had 
any  foundation  in  fact  or  evidence,  it  has  just  as 
much  after  the  experiment  has  failed  as  before 
the  experiment  was  made. 

27.  If,  now,  it  was  possible  to  devise  a  scheme 
of  legislation  which  should,  according  to  protec- 
tionist ideas,  be  just  the  right  jacket  of  taxation 
to  fit  this  country  to-day,  how  long  would  it  fit  ? 
Not  a  week.  Here  are  55  millions  of  people  on 
3-}  million  square  miles  of  land.  Every  day  new 
lines  of  communication  are  opened,  new  discover- 
ies made,  new  inventions  produced,  new  processes 


WHA  T  THE  TARIFF  DECISIONS  MEAN.        33 

applied,  and  the  consequence  is  that  the  indus- 
trial system  is  in  constant  flux  and  change.  How, 
if  a  correct  system  of  protective  taxes  was  a  prac- 
ticable thing  at  any  given  moment,  could  Con- 
gress keep  up  with  the  changes  and  readaptations 
which  would  be  required.  The  notion  is  prepos- 
terous, and  it  is  a  monstrous  thing,  even  on  the 
protectionist  hypothesis,  that  we  are  living  under 
a  protective  system  which  was  set  up  in  1864. 
The  weekly  tariff  decisions  by  the  treasury 
department  may  be  regarded  as  the  constant 
attempts  that  are  required  to  fit  that  old  system 
to  present  circumstances,  and,  as  it  is  not  possible 
that  new  fabrics,  new  compounds,  and  new  pro- 
cesses should  find  a  place  in  schedules  which  were 
made  twenty  years  before  they  were  invented, 
those  decisions  carry  with  them  the  fate  of  scores 
of  ne.w  industries  which  figure  in  no  census,  and  are 
taken  into  account  by  no  congressman.  There- 
fore, even  if  we  believed  that  the  protective  doc- 
trine was  sound,  and  that  some  protective  system 
was  beneficial,  and  that  the  one  which  we  have 
was  the  right  one  when  it  was  made,  we  should 
be  driven  to  the  conclusion  that  one  which  is 
twenty  years  old  is  sure  to  be  injurious  to-day. 


34  PROTECTIONISM. 

28.  There  is   nothing  then    in    the   legislative 
machinery,  by   which  the   tariff  is   to  be  made, 
which  is  calculated    to   win    the    confidence  of  a 
man  of  sense,  but  every  thing  to  the  contrary  ;  and 
the  experiments  of   such    legislation  which  have 
been  made,  have  produced  nothing  but  warnings 
against    the    device.      Instead    of    offering    any 
reasonable  ground  for  belief  that  our   errors   will 
be  corrected  and  our  productive  powers  increased, 
an  examination  of  the  tariff  as  a  piece  (of  legisla- 
tion, offers  to  us   nothing  but    a   burden,   which 
must  cripple  any  economic  power  which  we  have. 

C.)  Examination  of  the  Means  Proposed,   Viz., 

Taxes. 

29.  Every  tax  is  a  burden,  and  in  the  nature  of 
the  case  can  be  nothing  else.     In    mathematical 
language,  every  tax  is  a  quantity   affected   by  a 
minus  sign.     If  it  gets  peace  and  security,  that  is, 
if  it  represses  crime   and    injustice   and  prevents 
discord,  which  would  be  economically  destructive, 
then  it  is  a  smaller  minus  quantity  than  the    one 
which  would  otherwise  be  there,  and   that  •  is  the 
gain  by   good   government.     Hence,    like   every 
other  outlay  which  we  make,  taxes  must   be  con- 
trolled by  the  law  of  economy — to  get  the  best 


DISTRUST  TAXATION!  35 

and  most  possible  for  the  least  expenditure.  In- 
stead of  regarding  public  expenditure  carelessly, 
we  should  watch  it  jealously.  Instead  of  looking 
at  taxation  as  conceivably  a  good,  and  certainly 
not  an  ill,  we  should  regard  every  tax  as  on  the 
defensive,  and  every  cent  of  tax  as  needing  justi- 
fication. If  the  statesman  exacts  any  more  than 
is  necessary  to  pay  for  good  government  econom- 
ically administered,  he  is  incompetent,  and  fails 
in  his  duty.  I  have  been  studying  political 
economy  almost  exclusively  for  •the  last  fifteen 
years,  and  when  I  look  back  over  that  period  and 
ask  myself  what  is  the  most  marked  effect  which 
I  can  perceive  on  my  own  opinion,  or  on  my  stand- 
point, as  to  social  questions,  I  find  that  it  is  this : 
I  am  convinced  that  nobody  yet  understands  the 
multiplied  and  complicated  effects  which  are  pro- 
duced by  taxation.  I  am  under  the  most  pro- 
found impression  of  the  mischief  which  is  done  by 
taxation,  reaching,  as  it  does,  to  every  dinner- 
table  and  to  every  fire-side.  The  effects  of  taxa- 
tion vary  with  every  change  in  the  industrial  system 
and  the  industrial  status,  and  they  are  so  compli- 
cated that  it  is  impossible  to  follow,  analyze,  and 
systematize  them  ;  but  out  of  the  study  of  the 


36  PROTECTIONISM. 

subject  there  arises  this  firm  conviction :  taxation 
is  crippling,  shortening,  reducing  all  the  time,  over 
and  over  again. 

30.  Suppose   that .  a   man    has    an  income    of 
$1,000,  of  which  he  has  been  saving  $100  per  an- 
num with  no  tax.    Now  a  tax  of  $10  is  demanded 
of  him,  no  matter  what  kind  of  a  tax  or  how  laid. 
Is  he  to  get  the  tax  out  of  the   $900  expenditure 
or  out  of  the  $100  savings?     If  the  former,  then 
he  must  cut  down  his  diet,  or  his  clothing,  or  his 
house  accommodation  ;  that  is,  lower  his  standard 
of  comfort.     If  the  latter,  then  he  must  lessen  his 
accumulation  of  capital ;  that  is,  his  provision  for 
the  future.    Either  way  his  welfare  is  reduced  and 
can  not  be    otherwise    affected,  and,  through  the 
general  effect,  the  welfare    of   the  community  is 
reduced  by  the  tax.     Of  course    it    is    immaterial 
that  he  may  not  know  the  facts.     The  effects  are 
the  same.     In  this  view  of  the  matter  it  is  plain 
what  mischief  is  done  by    taxes  which  are  laid  to 
buy  parks,  libraries,  and  all  sorts  of  grand  things. 
The  tax-layer  is  not  providing  public  order.     He 
is  spending  other  people's  earnings  for  them.    He 
is    deciding    that    his   neighbor  shall  have    less 
clothes  and  more  library  or  park.     But  when  we 


A,  LESS  CLOTHES ;  B,  MORE  PROFITS.         37 

come  to  protective  taxes  the.  abuse  is  monstrous. 
The  legislator  who  has  in  his  hands  this  power  of  | 
taxation,  uses  it  to  say  that  one  citizen  shall  have 
less  clothes  in  order  that  he  may  contribute  to  the 
profits  of  another  citizen's  private  business. 

31.  Hence  if  we  look  at  the  nature  of  taxation, 
and  if  we  are  examining  protectionism   from  its 
own  standpoint,  under  the  assumption   that  it  is 
true,  instead  of  finding  any  confirmation    of  its 
assumptions,  in  the  nature  of  the  means  which  it 
proposes    to  use,  we   find  the  contrary.      Grant- 
ing that  people  make  mistakes  and  fail  of   the 
highest  prosperity  which  they  might   win  when 
they'act  freely,   we  see  plainly  that   more  taxes 
can  not  help  to  lift  them  up  or  to  correct  their 
errors  ;  on  the  contrary,  all  taxation,  beyond  what 
is  necessary  for  an   economical  administration  of 
good  government,  is  either  luxurious  or  wasteful, 
and  if  such  taxation  could  tend  to  wealth,  waste 
would  make  wealth. 

D.)  Examination  of  the  plan  of  Mutual 
Taxation. 

32.  Suppose  then  that  the  industries  and  sec- 
tions all  begin  to  tax  each  other  as  we  see  that 
they  do  under  protection.     Is  it  not   plain  that 


v/ 


38  PROTECTIONISM. 

the  taxing  operation  can  do  nothing  but  transfer 
products,  never  by  any  possibility  create  them  ? 
The  object  of  the  protective  taxes  is  to  "  effect 
die  diversion  of  a  part  of  the  capital  and  labor 
of  the  country  from  the  channels  in  which  it 
would  run  otherwise."  To  do  this  it  must  find  a 
fulcrum  or  point  of  reaction,  or  it  can  exert  no 
force  for  the  effect  it  desires.  The  fulcrum  is 
furnished  by  those  who  pay  the  tax  Take  a  case. 
Pennsylvania  taxes  New  England  on  every  ton  of 
iron  and  coal  used  in  its  industries.  Ohio  taxes 
New  England  on  all  the  wool  obtained  from  that 
state  for  its  industries.*  New  England  taxes  Ohio 
and  Pennsylvania  on  all  the  cottons  and  woolens 
which  it  sells  to  them.  What  is  the  net  final 
result?  It  is  mathematically  certain  that  the 
only  result  can  be  that  (i)  New  England  gets  back 
just  all  she  paid  (in  which  case  the  system  is  nil, 
save  for  the  expense  of  the  process  and  the 
limitation  it  imposes  on  the  industry  of  all),  or, 

*  The  wool  growers  held  a  convention  at  St.  Louis  May  28, 
1885,  at  which  they  estimated  their  loss  by  the  reduction  of  the 
tax  on  wool  in  1883,  or  the  difference  between  what  they  got  by 
this  tax  before  that  date  and  after,  at  ninety  million  dollars  (N. 
Y.  Times,  May  29).  If  that  sum  is  what  they  lost,  it  is  what  the 
consumers  gained.  They  are  very  angry,  and  will  not  vote  for 
any  one  who  will  not  help  to  re-subject  the  consumers  to  this 
tribute  to  them. 


THE   WAY  A  KING  DID  IT.  39 

(2)  that  New  England  does  not  get  back  as  much 
as  she  paid  (in  which  case  she  is  tributary  to  the 
others),  or,  (3)  that  she  gets  back  more  than  she 
paid  (in  which  case  she  levies  tribute  on  them). 
Yet,  on  the  protectionist  notion,  this  system 
extended  to  all  sections,  and  embracing  all  indus- 
tries, is  the  means  of  producing  national  pros- 
perity. When  it  is  all  done,  what  does  it  amount 
to  except  that  all  Americans  must  support  all 
Americans?  How  can  they  do  it  better  than  for 
each  to  support  himself  to  the  best  of  his  ability  ? 
Then,  however,  all  the  assumptions  of  protection- 
ism must  be  abandoned  as  false. 

33.  In  1676  King  Charles  II.  granted  to  his 
natural  son,  the  Duke  of  Richmond,  a  tax  of  a 
shilling  a  chaldron  on  all  the  coal  which  was 
exported  from  the  Tyne.  We  regard  such  a  grant 
as  a  shocking  abuse  of  the  taxing  power.  It  is, 
however,  a  very  interesting  case  because  the  mine- 
owner  and  the  tax-owner  were  two  separate  per. 
sons,  and  the  tax  can  be  examined  in  all  its  separ- 
ate iniquity.  If,  as  I  suppose  was  the  case,  the 
Tyne  valley  possessed  such  superior  facilities  for 
producing  coal  that  it  had  a  qualified  monopoly, 
the  tax  fell  on  the  coal  mine  owner  (landlord^ ; 


40  PROTECTIONISM. 

that  is,  the  king  transferred  to  his  son  part  of  the 
property  which  belonged  to  the  Tyne  coal  own- 
ers.     In   that   view   the  case  may    come    home 
to    some  of  our  protectionists  as  it    would    not 
if    the    tax    had    fallen    on    the    consumers.      If 
Congress     had     pensioned     General    Grant      by 
giving  him  75  cents  a  ton  on  all   the   coal  mined 
in  the  Lehigh  Valley,  what  protests     we    should 
have  heard  from    the    owners    of    coal    lands    in 
that  district !     If   the    king's  son,   however,    had 
owned   the  coal   mines,  and  worked    them    him- 
self, and    if  the  king  had  said  :    "  I    will  author- 
ize you  to   raise   the  price    of   your   coal    a  shil- 
ling a  chaldron,   and,  to  enable   you   to  do   it,  I 
will   myself   tax  ,  all   coal   but    yours  a  shilling  a 
chaldron/'    then    the    device    would    have  been 
modern    and    enlightened    and   American.      We 
have  done  just  that  on  emery,  copper  and  nickel. 
Then  the  tax  comes  out  of  the  consumer.     Then 
it  is  not,  according  to  the  protectionist,  harmful, 
but    the  key  to    national   prosperity,    the   thing 
which  corrects  the  errors  of  our  incompetent  self- 
will,  and  leads  us  up  to  better  organization  of  our 
industry    than    we,   in    our    unguided  stupidity, 
could  have  made, 


WHAT  AN  INDUSTRY  1$.  41 

E.)  Examination  of  the  Proposal  to  "  Create  an 
Industry." 

34.  The  protectionist   says,  however,  that  he  is 
going  to  create  an  industry.     Let  us  examine  this 
notion   also   from    his    standpoint,   assuming  the 
truth  of  his  doctrine,  and  see  if  we  can   find   any 
thing  to  deserve  confidence.     A  protective  tax, 
according  to  the  protectionist's  definition  (§   13) 
"  has  for  its   object  to  effect  the  diversion  of  a 
part  of  the  labor  and  capital  of  the  people   *  *  *    ^ 
into  channels  favored  or  created  by  law."     If  we 
follow  out  this  proposal,  we  shall  see  what  those 
channels  are,  and  shall  see  whether  they  are  such 

as  to  make  us  believe  that  protective  taxes  can 
increase  wealth. 

35.  [What  is  an  industry?     Some  people  will 
answer:    It  is  an  enterprise  which  gives  employ-    ^ 
ment.     Protectionists  seem  to  hold  this  viewj  and 
they  claim    that  they  "  give  work  "   to  laborers 
when  they  make  an  industry.     On  that  notion  we 
live  to  work ;  we  do  not  work  to  live.     But  we  do 
not  want  work.     We  have  too  much  work.     We 
want  a  living ;  and  work  is  the  inevitable  but  dis- 
agreeable price  we  must  pay.     Hence  we  want  as 
much  living  at  as  little  price  as  possible.      We 


42  PROTECTIONISM. 

shall  see  that  the  protectionist  does  "make  work" 
in  the  sense  of  lessening  the  living  and  increasing 
the  price.  But  if  we  want  a  living  we  want  capi- 
tal. If  an  industry  is  to  pay  wages,  it  must  be 
backed  up  by  capital.  Therefore  protective 
taxes,  if  they  were  to  increase  the  means  of  living, 
would  need  to  increase  capital.  How  can  taxes 
increase  capital?  Protective  taxes  only  take 
from  A  to  give  to  B.  Therefore,  if  B  by 
this  arrangement  can  extend  his  industry  and 
"  give  more  employment,"  A's  power  to  do  the 
same  is  diminished  in  at  least  an  equal  degree. 
Therefore,  even  on  that  erroneous  definition  of 
an  industry,  there  is  no  hope  for  the  protection- 
ist. 

'  '36.  An  industry  is  an  organization  of  labor  and 
capital  for  satisfying  some  need  of  the  community. 
It  is  not  an  end  in  itself.  It  is  not  a  good  thing 
to  have  in  itself.  It  is  not  a  toy  or  an  ornament. 
If  we  could  satisfy  our  needs  without  it  we  should 
be  better  off,  not  worse  off.  How  then  can  we 
create  industries? 

37.  If  any  one  will  find,  in  the  soil  of  a  district, 
some  new  power  to  supply  human  needs,  he  can 
endow  that  district  with  a  new  industry.  If  he 


NOT  ENOUGH  WORK  TO  DO.  43 

will  invent  a  mode  of  treating  some  natural  de- 
posit, ore  or  clay  for  instance,  so  as  to  provide  a 
tool  or  utensil  which  is  cheaper  and  more  con- 
venient than  what  is  in  use,  he  can  create  an 
industry.  If  he  will  find  out  some  new  and  better 
way  to  raise  cattle  or  vegetables,  which  is,  per- 
haps, favored  by  the  climate,  he  can  do  the  same. 
If  he  invents  some  new  treatment  of  wool,  or 
cotton,  or  silk,  or  leather,  or  makes  a  new  combi- 
nation which  produces  a  more  convenient  or 
attractive  fabric,  he  may  do  the  same.  The  tele- 
phone is  a  new  industry.  What  measures  the 
gain  of  it?  Is  it  the  "  employment  "  of  certain 
persons  in  and  about  telephone  offices  ?  The  gain 
is  in  the  satisfaction  of  the  need  of  communica- 
tion between  people  at  less  cost  of  time  and 
labor.  It  is  useless  to  multiply  instances.  It  can 
be  seen  what  it  is  to  "  create  an  industry."  It  j 
takes  brains  and  energy  to  do  it.  How  can  taxes 
do  it? 

38.  Suppose  that  we  create  an  industry  even  in 
this  sense,  What  is  the  gain  of  it  ?  The  people  of 
Connecticut  are  now  earning  their  living  by 
employing  their  labor  and  capital  in  certain  parts 
of  the  industrial  organization.  They  have  changed 


44  PROTECTIONISM. 

their  "  industries "   a  great  many  times.      If    it 
should  be  found  that  they  had  a  new  and  better 
chance  hitherto   undeveloped,  they  might   all  go 
into  it.     To  do  that  they  must  abandon  what  they 
are  now  doing.     They  would  not    change   unless 
gains  to  be  made  in  the  new  industry  were  greater. 
Hence  the  gain  is  the  difference  only  between  the 
profits  of  the  old  and  the  profits  of  the  new.    The 
protectionists,   however,  when    they    talk    about 
"  creating  an  industry,"  seem  to  suppose  that  the 
total   profit  of  the  industry  (and  some  of  them 
seem  to  think  that  the  total  expenditure  of  capi- 
tal) measures  their  good  work.     In  any  case,  then, 
even  of  a  true  and  legitimate  increase  of  industrial 
power  and  opportunity,  the  only  gain  would  be  a 
margin.      But,   by   our  definition,   "a  protective 
duty  has  for  its  object  to  effect  the  diversion  of  a 
part  of  the  capital  and  labor  of  the  people  out  of 
j  the  channels  in  which   it  would   otherwise  run." 
'    Plainly   this    device    involves    coercion.       People 
would  need  no  coercion  to  go  into  a  new  industry 
which  had  a  natural  origin  in  new  industrial  power 
or  opportunity.     No  coercion  is  necessary  to  make 
men  buy  dollars  at  98  cents    apiece.     The  case 
for  coercion  is  when  it  is  desired  to   make  them 


BUYING  DOLLARS  TOO  DEARLY.  45 

buy  dollars  at  101  cents  apiece.  Here  the  states" 
man  with  his  taxing  power  is  needed,  and  can  do 
something.  What?  He  can  say:  "If  you  will 
buy  a  dollar  at  101  cents,  I  can  and  will  tax  John 
over  there  two  cents  for  your  benefit ;  one  to  make 
up  your  loss  and  the  other  to  give  you  a  profit." 
Hence,  on  the  protectionist' sown  doctrine,  his  device 
is  not  needed,  and  can  not  come  into  use,  when  a 
new  industry  is  created  in  the  true  and  only  rea- 
sonable sense  of  the  words,  but  only  when  and 
because  he  is  determined  to  drive  the  labor  and  capi- 
tal of  the  country  into  a  disadvantageous  and  waste- 
ful employment. 

39.  Still  further,  it  is  obvious  that  the  pro- 
tectionist, instead  of  "  creating  a  new  industry," 
has  simply  taken  one  industry  and  set  it  as  a  parasite 
to  live  upon  another.  Industry  is  its  own  reward. 
A  man  is  not  to  be  paid  a  premium  by  his  neigh- J 
bqrs  for  earning  his  own  living.  A  factory,  an 
insane  asylum,  a  school,  a  church,  a  poor-house, 
and  a  prison  can  not  be  put  in  the  same  economic 
category.  We  know  that  the  community  must 
be  taxed  to  support  insane  asylums,  poor-houses, 
and  jails.  When  we  come  upon  such  institutions 
we  see  them  with  regret. .  They  arc  wasting 


46  PROTECTIONISM. 

capital.  We  know  that  the  industrious  people 
all  about,  who  are  laboring  and  producing,  must 
part  with  a  portion  of  their  earnings  to  supply  the 
waste  and  loss  of  these  institutions.  Hence  the 
bigger  they  are  the  sadder  they  are. 

40.  As  for  the  schools  and  churches,  we  know 
that  society  must   pay  for  and  keep  up  its  own 
conservative  institutions.     They  cost  capital  and 
do  not   pay  back  capital  directly,   although  they 
do  indirectly,  and  in  the  course  of  time,   in  ways 
which  we  could  trace  out  and  verify,  if  that  were 
our  subject.     Here,  then,  we  have  a  second  class 
of  institutions. 

41.  But  the  factories  and   farms  and   foundries 
are  the   productive  institutions  which  must  pro- 
vide  the    support    of   these    consuming    institu- 
tions.    If  the  factories,    etc.,  put  themselves  on 
a  line  with  the    poor-houses,  or  even    with    the 
schools,  what  is  to  support  them   and  all  the  rest 
too?      They  have  nothing  behind  them.      If   in 
any  measure  or  way  they  turn  into  burdens  and 
objects  of  care  and  protection,  they  can   plainly 
do  it  only  by  part  of  them  turning  upon  the  other 
part,  and  this  latter  part  will  have  to  bear  the 
burden  of  all  the  consuming  institutions,  including 


CONSUMING  INDUSTRIES.  47 

~N 

the  consuming  industries.     For  a  protected  factory    ^ 
is  not  a  producing  industry.     It  is  a  consuming  ' 
industry!     If  a  factory  is  (as  the  protectionist 
alleges)  a  triumph  of  the  tariff,  that  is,  if  it  would 
not  be  but  for  the  tariff  (and  otherwise  he  has 
nothing  to  do  with  it),   then  it  is  not  producing  ;  / 
it  is  consuming.     It  is  a  burden  to  be  borne.     The  I 
bigger  it  is  the  sadder  it  is. 

42.  If  a  protectionist  shows  me  a  woolen  mill 
and  challenges  me  to  deny  that  it  is  a  great  and 
valuable  industry,  I  ask  him  whether  it  is  due  to 
the  tariff.  If  he  says  no,  then  I  will  assume  that 
it  is  an  independent  and  profitable  establishment, 
but  then  it  is  out  of  this  discussion  as  much  as  a 
farm  or  a  doctor's  practice.  If  he  says  yes,  then 
I  answer  that  the  mill  is  not  an  industry  at  all. 
We  pay  sixty  per  cent,  tax  on  cloth  simply  in  order 
that  that  mill  may  be.  It  is  not  an  institution  for 
getting  us  cloth,  for,  if  we  went  into  the  market 
with  the  same  products  which  we  take  there  now 
and  if  there  were  no  woolen  mill,  we  should  get 
all  the  cloth  we  want,  but  the  mill  is  simply  an 
institution  for  making  cloth  cost  per  yard  sixty  per 
cent,  more  of  our  products  than  it  otherwise  would. 
That  is  the  one  and  only  function  which  the  mill 


48  PROTECTIONISM. 

has  added,  by  its  existence,  to  the  situation.  I 
have  called  such  a  factory  a  "  nuisance."  The 
word  has  been  objected  to.  The  word  is  of  no 
consequence.  He  who,  when  he  goes  into  a  de- 
bate, begins  to  whine  and  cry  as  soon  as  the  blows 
get  sharp,  should  learn  to  keep  out.  What  I 
meant  was  this :  A  nuisance  is  something  which 
by  its  existence  and  presence  in  society  works  loss 
and  damage  to  the  society — works  against  the 
general  interest,  not  for  it.  A  factory  which  gets 
in  the  way  and  hinders  us  from  attaining  the 
comforts  which  we  are  all  trying  to  get, — which 
makes  harder  the  terms  of  acquisition  when  we 
are  all  the  time  struggling  by  our  arts  and  sciences 
to  make  those  terms  easier,  is  a  harmful  thing, 
and  noxious  to  the  common  interest. 

43.  Hence,  once  more,  starting  from  the  pro- 
tectionist's hypothesis,  and  assuming  his  own  doc- 
trine, we  find  that  he  can  not  create  an  industry. 
He  only  fixes  one  industry  as  a  parasite  upon 
another,  and  just  as  certainly  as  he  has  intervened 
in  the  matter  at  all,  just  so  certainly  has  he  forced 
labor  and  capital  into  less  favorable  employment 
than  they  would  have  sought  if  he  had  let  them 
alone.  When  we  ask  which  "  channels"  those 


WASTE  MAKES   WEALTH.  49 

are  which  are  to  be  "  favored  or  created  by 
law,"  we  find  that  they  are,  by  the  hypothesis, 
and  by  the  whole  logic  of  the  protectionist  sys- 
tem, the  industries  which  do  not  pay.  The  pro- 
tectionists propose  to  make  the  country  rich  by 
laws  which  shall  favor  or  create  these  industries, 
but  these  industries  can  only  waste  capital,  so 
that  if  they  are  the  source  of  wealth,  zvaste  is  the 
source  of  wealth.  Hence  the  protectionist's 
assumption  that  by  his  system  he  could  correct 
our  errors  and  lead  us  to  greater  prosperity  than 
we  would  have  obtained  under  liberty,  has  failed 
again,  and  we  find  that  he  wastes  what  power 
we  do  possess. 

F.)   Examination,   of  the   Proposal    to    Develop 
our  Natural  Resources. 

44.  "But,"  says  the  protectionist,  "do.  you 
mean  to  say  that,  if  we  have  an  iron  deposit  in  our 
soil,  it  is  not  wise  for  us  to  open  and  work  it  ?  " 
"  You  mean,  no  doubt/'  I  reply,  "  open  and  work 
it  under  protective  help  and  stimulus  ;  for,  if  there 
is  an  iron  deposit,  the  United  States  does  not  own 
it.  Some  man  owns  it.  If  he  wants  to  open  and 
work  it,  we  have  nothing  to  do  but  wish  him 
God-speed,"  "Very  well,"  he  says,  "  understand 


50  PROTECTIONISM. 

it  that  he  needs  protection/'  Let  us  examine 
this  case  then,  and  still  we  will  do  it  assuming  the 
truth  of  the  protectionist  doctrine.  Let  us  see 
where  we  shall  come  out. 

The  man  who  has  discovered  iron  (on  the  pro- 
tectionist doctrine),  when  there  is  no  tax,  does 
not  collect  tools  and  laborers  and  go  to  work.  He 
goes  to  Washington.  He  visits  the  statesman, 
and  a  dialogue  takes  place. 

Iron  man. — "  Mr.  Statesman,  I  have  found  an 
iron  deposit  on  my  farm." 

Statesman. — "  Have  you,  indeed  ?  That  is  good 
news.  Our  country  is  richer  by  one  new  natural 
resource  than  we  have  supposed/' 

Iron  man. — "  Yes,  and  I  now  want  to  begin 
mining  iron/' 

Statesman. — "  Very  well,  go  on.  We  shall  be  glad 
to  hear  that  you  are  prospering  and  getting  rich." 

Iron  man. — "  Yes,  of  course.  But  I  am  now 
earning  my  living  by  tilling  the  surface  of  the 
ground,  and  I  am  afraid  that  I  can  not  make  as 
much  at  mining  as  at  farming." 

Statesman. — "  That  is  indeed  another  matter. 
Look  into  that  carefully  and  do  not  leave  a  better 
industry  for  a  worse/' 


NE  W  NA  TURAL  RE  SO  URGES.  5 1 

Iron  man. — "  But  I  want  to  mine  that  iron.  It 
does  not  seem  right  to  leave  it  in  the  ground 
when  we  are  importing  iron  all  the  time,  but  I 
can  not  see  as  good  profits  in  it  at  the  present 
price  for  imported  iron  as  I  am  making  out  of 
what  I  raise  on  the  surface.  I  thought  that  per- 
haps you  would  put  a  tax  on  all  the  imported 
iron  so  that  I  could  get  more  for  mine.  Then  I 
could  see  my  way  to  give  up  farming  and  go  to 
mining/' 

Statesman. — "  You  do  not  think  what  you  ask. 
That  would  be  authorizing  you  to  tax  your  neigh- 
bors, and  would  be  throwing  on  them  the  risk  of 
working  your  mine,  which  you  are  afraid  to  take 
yourself." 

Iron  man  (aside). — "  I  have  not  talked  the  right 
dialect  to  this  man.  I  must  begin  all  over  again. 
(Aloud).  Mr.  Statesman,  the  natural  resources  of  \  V 
this  continent  ought  to  be  developed.  American 
industry  must  be  protected.  The  American  la- 
borer must  not  be  forced  to  compete  with  the 
pauper  labor  of  Europe." 

Statesman. — "  Now  I  understand  you.  Now 
you  talk  business.  Why  did  you  not  say  so  be- 
fore ?  How  much  tax  do  ou  want  ?  " 


52  PROTECTIONISM. 

The  next  time  that  a  buyer  of  pig  iron  goes  to 
market  to  get  some,  he  finds  that  it  costs  thirty 
bushels  of  wheat  per  ton  instead  of  twenty. 

"  What  has  happened  to  pig-iron?  "  says  he. 

"Oh!  haven't  you  heard?"  is  the  reply.  "A 
new  mine  has  been  found  down  in  Pennsylvania. 
We  have  got  a  new  'natural  resource.'  " 

"  I  haven't  got  a  new  'natural  resource,'  "  says 
he.  "  It  is  as  bad  for  me  as  if  the  grasshoppers 
had  eaten  up  one-third  of  my  crop." 

45.  That  is  just  exactly  the  significance  of  a  new 
resource  on  the  protectionist  doctrine.  We  had 
the  misfortune  to  find  emery  here.  At  once  a  tax 
was  put  on  it  which  made  it  cost  more  wheat,  cot- 
ton, tobacco,  petroleum,  or  personal  services  per 
pound  than  ever  before.  A  new  calamity  befell 
us  when  we  found  the  richest  copper  mines  in  the 
world  in  our  territory.  From  that  time  on  it  cost 
us  five  (now  four)  cents  a  pound  more  than  before. 
By  another  catastrophe  we  found  a  nickel  mine, 
thirty  cents  (now  fifteen)  a  pound  tax !  Up  to 
this  time  we  have  had  all  the  tin  that  we  wanted 
above  ground,  because  beneficent  nature  has  re- 
frained from  putting  any  underground  in  our  terri- 
tory. In  the  metal  schedule,  where  the  metals 


RESOURCES  ARE  CALAMITIES.  53 

which  we  unfortunately  possess  are  taxed  from 
forty  to  sixty  per  cent.,  tin  alone  is  free.  Every 
little  while  a  report  is  started  that  tin  has  been 
found.  Hitherto  these  reports  have  happily  all 
proved  false.  It  is  now  said  that  tin  has  been 
-found  in  West  Virginia  and  Dakotah.  We  have 
reason  to  devoutly  hope  that  this  may  prove 
false,  for,  if  it  should  prove  true,  no  doubt  the 
next  thingwill  be  forty  per  cent,  tax  on  tin.  The 
mine-owners  say  that  they  want  to  exploit  the 
mine.  They  do  not.  They  want  to  make  the 
mine  an  excuse  to  exploit  the  taxpayers. 

46.  Therefore,  when  the  protectionist  asks 
whether  we  ought  not  by  protective  taxes  to 
force  the  development  of  our  own  iron  mines,  the 
answer  is,  that,  on  his  own  doctrine,  he  has 
developed  a  new  philosophy,  hitherto  unknown, 
by  which  "  natural  resources  "  become  national 
calamities,  and  the  more  a  country  is  endowed  by 
nature  the  worse  off  it  is.  Of  course,  if  the  wise 
philosophy  is  not  simply  to  use,  with  energy  and 
prudence,  all  the  natural  opportunities  which  we 
possess,  but  to  seek  "  channels  favored  or  created 
by  law,"  then  this  view  of  natural  resources  is 
perfectly  consistent  with  that  philosophy,  for  it  is 


54  PROTECTIONISM. 

simply  saying  over  again  that  waste  is  the  key  of 
wealth. 

G.)  Examination  of  the  Proposal  to  liaise  Wages. 

47.  "  But,"  he  says  again,   "  we  want  to  raise 
wages  and  favor  the  poor  working  man/'     "Do 
you  mean  to  say,"  I  reply,  "  that  protective  taxes 
raise  wages— that  that  is  their  regular  and  constant 
effect?"     "Yes,"  he  replies,  "that  is  just  what 
they  do,  and  that  is  why  we  favor  them.     We 
are    the    poor   man's   friends.     You    free-traders 
want  to  reduce  him  to  the  level  of  the  pauper 
laborers  of  Europe."     "  But  here,  in  the  evidence 
offered  at  the  last  tariff  discussion   in   Congress, 
the  employers  all  said  that  they  wanted  the  taxes 
to  protect   them    because  they   had    to  pay  such 
high  wages."     "  Well,  so  they  do."     "  Well  then, 
if  they  get  the  taxes  raised  to  help  them  out  when 
they  have  high  wages  to  pay,  how  are  the  taxes 
going  to  help  them  any  unless  the  taxes  lower 
wages  ?     But  you  just  said  that  taxes  raise  wages. 
Therefore,  if  the  employer  gets  the  taxes  raised, 
he  will  no  sooner  get    home   from   Washington 
than  he  will  find  that  the  very  taxes  which  he  has 
just  secured  have  raised  wages.   Then  he  must  go 


BOOT-MAN,  HA  T-MAN,  AND  CLOTH-MAN.       55 

back  to  Washington  to  get  the  taxes  raised  to  off- 
set that  advance,  and  when  he  gets  home  again  he 
will  find  that  he  has  only  raised  wages  more,  and 
so  on  forever.  You  are  trying  to  teach  the  man 
to  raise  himself  by  his  boot  straps.  Two  of  your 
propositions  brought  together  eat  each  other." 

48.  We  will,  however,  pursue  the  protectionist 
doctrine  of  wages  a  little  further.  It  is  totally4^ 
false  that  protective  taxes  raise  wagesv  As  I  will 
show  further  on  (§91  and  following),  protective 
taxes  lower  wages.  Now,  however,  I  am  assum- 
ing the  protectionist's  own  premises  and  doctrines 
all  the  time.  He  says  that  his  system  raises 
wages.  Let  u's  go  to  see  some  of  the  wages  class 
and  get  some  evidence  on  this  point.  We  will 
take  three  wage-workers,  a  boot-man,  a  hat-man, 
and  a  cloth-man.  First  we  ask  the  boot-man, 
"  Do  you  win  any  thing  by  this  tariff?  "  "  Yes," 
he  says,  "I  understand  that  I  do."  "How?" 
"  Well,  the  way  they  explain  it  to  me  is  that  when 
any  body  wants  boots  he  goes  to  my  boss,  pays 
him  more  on  account  of  the  tax,  and  my  boss 
gives  me  part  of  it."  "  All  right !  Then  your 
comrades  here,  the  hat-man  and  the  cloth-man, 
pay  this  tax  in  which  you  share  ?  "  "  Yes,  I  sup- 


56  PROTECTIONISM. 

pose  so.  I  never  thought  of  that  before.  I  sup- 
posed that  rich  people  paid  the  taxes,  but  I  suppose 
that  when  they  buy  boots  they  must  do  it  too/' 
"  And  when  you  want  a  hat  you  go  and  pay  the 
tax  on  halts,  part  of  which  (as  you  explain  the  sys- 
tem) goes  to  your  friend  the  hat-man ;  and  when 
you  want  cloth  you  pay  the  tax  which  goes  to  bene- 
fit your  friend  the  cloth-man  ?  "  "I  suppose  that 
it  must  be  so/'  We  go  then  to  see  the  hat-man 
and  have  the  same  conversation  with  him,  and  we 
go  to  see  the  cloth-man  and  have  the  same  con- 
versation with  him.  Each  of  them  then  gets  two 
taxes  and  pays  two  taxes.  Three  men  illustrate 
r  the  whole  case.  If  we  should  take  a  thousand 
men  in  a  thousand  industries  we  should  find  that 
each  paid  999  taxes,  and  each  got  999  taxes,  if  the 
system  worked  as  it  is  said  to  work.  What  is  the 
upshot  of  the  whole  ?  Either  they  all  come  out 
even  on  their  taxes  paid  and  received,  or  some  of 
the  wage  receivers  are  winning  something  out  of 
other  wage  receivers  to  the  net  detriment  of  the 
whole  class.  If  each  man  is  creditor  for  999  taxes, 
and  each  debtor  for  999  taxes,  and  if  the  system 
is  "  universal  and  equal,"  we  can  save  trouble  by 
each  drawing  999  orders  on  the  creditors  to  pay 


THE  THOUSANDTH  TAX,  57 

to  themselves  their  own  taxes,  and  we  can  set  up 
a  clearing  house  to  wipe  off  all  the  accounts. 
Then  we  come  down  to  this  as  the  net  result  of 
the  system  when  it  is  "  universal  and  equal,"  that 
each  man  MS  a  consumer  pays  taxes  to  himself  as  a 
prodiiccr\f^\\-^\.  is  what  is  to  make  us  all  rich. 
We  can/accomplish  it  just  as  well  and  far  more 
easily,  when  we  get  up  in  the  morning,  by  trans- 
ferring our  cash  from  one  pocket  to  the  other. 

49.  One  point,  however,  and  the  most  import- 
ant of  all,  remains  to  be  noticed.  How  about  the 
thousandth  tax?  How  is  it  when  the  boot-man 
wants  boots,  and  the  hat-man  hats,  and  the  cloth- 
man  cloth  ?  He  has  to  go  to  the  store  on  the 
street  and  buy  of  his  own  boss,  at  the  mar- 
ket -price  (tax  on)  the  very  things  which  he  made 
himself  in  the  shop.  He  then  pays  the  tax  to  his 
own  employer,  and  the  employer,  according  to 
the  doctrine,  "shares"  it  with  him.  Where  is 
the  offset  to  that  part  which  the  employer  keeps? 
There  is  none.  The  wages-class,  even  on  the  pro- 
tectionist explanation,  may  give  or  take  from  each 
other,  but  to  their  own  employers,  they  give  and 
take  not.  At  election  time  the  boss  calls  them  in 
and  tells  them  that  they  must  vote  for  protection 


58  PROTECTIONISM. 

or  he  must  shut  up  the  shop,  and  that  they  ought 
to  vote  for    protection,  because  it  makes  their 
wages  high.     If,  then,  they  believe  in  the  system, 
just  as  it  is  taught  to  them,  they  must  believe 
that  it  causes  him  to  pay  them  big  wages,  out  of 
which  they  pay  back  to  him  big  taxes,   out  of 
which  he  pays  them  a  fraction  back  again,  and 
that,  but  for  this  arrangement,  the  business  could 
not  go  on  at  all..  A  little  reflection  shows  that  this 
just  brings  up  the  question  for  a  wage-earner :  How 
much  can  I  afford  to  pay  my  boss  for  hiring  me?. 
or,  again,  which  is  just  the  same  thing  in  other 
words:     What  is  the  net   reduction  of  my  wages 
below  the  market  rate  under  freedom  which  results 
from  this  system  ?  (see  §  65). 

So.  Let  it  not  be  forgotten  that  this  result  is 
reached  by  accepting  protectionism  and  reasoning 
forward  from  its  doctrines  and  according  to  its 
principles.    In  truth,  the  employes  get  no  share 
Urn  any  taxes  which  the  boss  gets  out  of  them  and 
Y  others  (see  §  91   fg.  for  the  truth  about  wages). 
Of  course,  when  this  or  any  other  subject  is  thor- 
oughly analyzed,  it  makes  no  difference  where  we 
begin  or  what  line  we    follow,  we   shall   always 
reach  the  same  result  if  the  result  is  correct.     If 


SO  ME  BOD  \ '  M  US  T  COMPE  TE.  59 

we  accept  the  protectionist's  own  explanation  of 
the  way  in  which  protection  raises  wages  we  find 
that  it  proves  that  protection  lowers  wages. 

II.)  Examination   of  the   Proposal   to   Prevent 
Competition  by  Foreign   Pauper  Labor. 

51.  The  protectionist  says  that  he  does  not  want 
the  American  laborer  to  compete  with  the  foreign 
"  pauper  laborer"  (see  §  99).  He  assumes  that  if 
the  foreign  laborer  is  a  woolen  operative,  the  only 
American  who  may  have  to  compete  with  him  is 
a  woolen  operative  here.  His  device  for  saving 
our  operatives  from  the  assumed  competition  is 
to  tax  the  American  cotton  or  wheat  grower,  on 
the  cloth  he  wears,  to  make  up  and  offset  to  the 
woolen  operative  the  disadvantage  under  which  he 
labors.  If  then,  the  case  were  true  as  the  protec- 
tionist states  it,  and  if  his  remedy  were  correct, 
he  would,  when  he  had  finished  his  operation, 
simply  have  allowed  the  American  woolen  opera- 
tive to  escape,  by  transferring  to  the  American 
cotton  or  wheat  grower  the  evil  results  of  com- 
petition with  "  foreign  pauper  labor/' 


60  PROTECTIONISM. 

I.)  Examination  of  the  Proposal  to  raise  the 
Standard  of  Public  Comfort. 

52.  But    the    protectionist    reiterates   that    he 
wants  to  make  our  people  well  off,  and  to  diffuse 
general  prosperity,  and  he  says  that  his  system 
does  this.     He  says  that  the  country  has  pros- 
pered under  protection  and  on  account  of  it.      He 
brings  from  the  census  the  figures  for  increased 
wealth  of  the  country,  and,  to  speak  of  no  miner 
errors,  draws  an  inference  that  we  have  prospered 
more  than  we  should  have  done  under  free  trade, 
which  is  what  he  has  to  prove,  without  noticing 
that  the  second  term  of  the  comparison  is  absent 
and  unattainable.     In  the  same   manner  I  once 
heard  a  man  argue  from  statistics,  who  showed  by 
the  small  loss  of  a  city  by  fire  that  its  fire  depart- 
ment cost  too  much.     I  asked  him  if  he  had  any 
statistics  of  the   fires  which  we  should  have  had 
but  for  the  fire  department  (see  §  102). 

53.  The   people  of  the   United  States  have  in- 
herited an  untouched  continent.     The  now  living 
generation  is  practicing  bonanza  farming  on  prai- 
rie soil  which  has  never  borne  a  crop.     The  popu- 
lation is  only  15  to  the  square  mile.     The  popula- 
tion of  England  and  Wales  is  446  to  the  square 


CHANCES  OF  PRO  SPIRIT  Y.  6 1 

mile;  that  of  the  British  Islands  290;  that 
of  Belgium  481;  of  France  180;  of  Germany 
216.  Bateman*  estimates  that  in  the  better  part 
of  England  or  Wales  a  peasant  proprietor  would 
need  from  ^/^  to  6  acres,  and,  in  the  worse  part, 
from  9  to  45  acres  on  which  to  support  "  a  healthy 
family."  The  soil  of  England  and  Wales,  equally 
divided  between  the  families  there,  would  give  only 
7  acres  apiece.  The  land  of  the  United  States, 
equally  divided  between  the  families  there,  would 
give  215  acres  apiece.  These  old  nations  give  us 
the  other  term  of  the  comparison  by  which  we 
measure  our  prosperity.  They  have  a  dense  pop- 
ulation on  a  soil  which  has  been  used  for  thou- 
sands of  years  ;  we  have  an  extremely  sparse  popu- 
lation on  a  virgin  soil.  We  have  an  excellent  cli- 
mate, mountains  full  of  coal  and  ore,  natural 
highways  on  the  rivers  and  lakes,  and  a  coast  in- 
dented with  sounds,  bays,  and  some  of  the  best 
harbors  in  the  world.  We  have  also  a  population 
of  good  national  character,  especially  as  regards 
the  economic  and  industrial  virtues.  The  sciences 

and    arts  are  highly   cultivated   among   us,    and 

\ 

*  Broderick,  English  Land  and  English  Landlords,  p.  194. 


62  PROTECTIONISM. 

our  institutions  are  the  best  for  the  development 
of  economic  strength.  As  compared  with  old 
nations  we  are  prosperous.  Now  comes  the  pro- 
tectionist statesman  and  says  :  "  The  things  which 
you  have  enumerated  are  not  the  causes  of  our 
comparative  prosperity.  Those  things  are  all  vain. 
Our  prosperity  is  not  due  to  them.  I  made  it 
with  my  taxes/* 

54  (a)  In  the  first  place  the  fact  is  that  we  sur- 
pass most  in  prosperity  those  nations  which  are 
most  like  us  in  their  tax  systems,  and  those  com- 
pared with  whom  our  prosperity  is  least  remarkable 
are  those  which  have  by  free  trade  offset  as  much  as 
possible  the  disadvantage  of  age  and  dense  popu- 
lation.    Since,  then,  we  find  greatest  difference  in 
prosperity  with  least  difference  in  tax,  and  least 
difference  in  prosperity  writh  greatest  difference  in 
tax,  we  can  not  regard  tax  as  a  cause  of  prosperity, 
but  as  an  obstacle  to  prosperity  which  must  have 
been   overcome  by  some   stronger   cause.     That 
such  is  the  case  lies  plainly  on  the  face  of  the 
facts.     The   prosperity   which  we    enjoy   is    the 
prosperity  which  God  and  nature  have  given  us 
mums  what  the  legislator  has  taken  from  it. 

55  (b)  We  prospered   with  slavery  just  as  we 


BENEFICENCE  OF  OUR  STATESMEN.  63 

have  prospered  with  protection.  The  argument 
that  the  former  was  a  cause  would  be  just  as 
strong  as  the  argument  that  the  latter  is  a 
cause. 

56  (c)  The  protectionists  take  to  themselves  as 
a  credit  all  the  advance   in  the  arts  of  the  last 
twenty-five  years,  because  they  have  not  entirely 
offset  it  and  destroyed  it. 

57  (d)  The  protectionists  claim  that  they  have 
increased  our  wealth.     All  the  wealth  that  is  pro- 
duced  must   be  produced    by  labor   and    capital  - 
applied  to  land.     The  people  have  wrought  and 
produced.     The  tax  gatherer  has  only  subtracted 
something.     Whether  he  used  what  he  took  well 
or  ill,  he  subtracted.    He  could  not  do  any  thing 
else.     Therefore,  whatever  wealth  we  see  about 
us,  and  whatever  wealth  appears  in  the  census  is 
what  the  people  have  produced,  less  what  the  tax 
gatherer  has  taken  out  of  it. 

58-  (e)  If  the  members  of  Congress  can  estab- 
lish for  themselves  some  ideal  of  the  grade  of  com- 
fort which  the  average  American  citizen  ought  to 
enjoy,  and  then  just  get  it  for  him,  they  have  used 
their  power  hitherto  in  a  very  beggarly  manner. 
For,  although  the  average  status  of  our  people  is 


64  PROTECTIONISM. 

high  when  compared  with  that  of  other  people  on 
the  globe,  nevertheless,  when  compared  with  any 
standard  of  ideal  comfort,  it  leaves  much  to  be 
desired.  If  Congress  has  the  power  supposed, 
they  surely  ought  not  to  measure  the  exercise  of  it 
by  only  making  us  better  off  than  Europeans. 

59  (/)  During  the  late  presidential  campaign 
the  protectionist  orators  assured  the  people  that 
they  meant  to  make  everybody  well  off,  that  they 
wished  our  people  to   be  prosperous,  contented, 
etc.,  etc.  I  wish  so  too.  I  wish  that  all  my  readers 
may  be  millionaires.    I  freely  and  sincerely  confer 
on  them  all  the  bounty  of  my  good  wishes.  They 
will  not  find  a  cent  more  in  their  pockets  on  that 
account.  The  congressmen  have  no  power  to  bless 
my  readers  which  I  have   not,  save  one ;  that  is, 
the  power  to  tax  them. 

60  (g)  If  the  congressmen  are   determined  to 
elevate  the  comfort  of  the  population  by  taxing 
the  population,  then  every  new  ship  load  of  immi- 
grants must  be  regarded  as  a  new  body  of  persons 
whom  we  must  "  elevate  "  by  the  taxes  we  have  to 
pay.     It  is  said  that  an  Irishman  affirmed  that  a 
dollar  in  America  would   not   buy   more  than  a 
shilling  in  Ireland.     He  was  asked  why  then  he 


NO  COMFORT  IN  TAXES.  65 

did  not  stay  in  Ireland.  He  replied  that  it  was 
because  he  could  not  get  the  shilling  there.  That 
is  a  good  story,  only  it  stops  just  where  it  ought 
to  begin.  The  next  question  is :  How  does  he  get 
the  dollar  when  he  comes  to  America  ?  The  pro- 
tectionist wants  us  to  suppose  that  he  gets  it  by 
grace  of  the  tariff.  If  so  he  gets  it  out  of  those 
who  were  here  before  he  came.  But  plainly  no 
such  thing  is  true.  He  gets  it  by  earning  it,  and 
he  adds  two  dollars  to  the  wealth  of  the  country 
while  earning  it.  The  only  thing  the  tariff  does 
in  regard  to  it  is  to  lower  the  purchasing  power  of; ' 
the  dollar,  if  it  is  spent  for  products  of  manufac-' 
ture,  to  seventy  cents. 

61.  Here,  again,  then,  we  find  that  protective 
taxes,  if  they  do  just  what  the  protectionist  says 
that  they  will  do,  produce  the  very  opposite  effects 
from  those  which  he  says  they  will  produce.  They 
lessen  wealth,  reduce  prosperity,  diminish  average 
comfort,  and  lower  the  standard  of  living.  (See 

§30.) 


CHAPTER  III. 
PROTECTIONISM  EXAMINED  ADVERSELY. 

62.  I  have  so  far  examined  protectionism  as  a 
philosophy  of  national  wealth,  assuming  and 
accepting  its  own  doctrines,  and  following  them 
out,  to  see  if  they  will  issue  as  is  claimed.  We 
have  found  that  they  do  not,  but  that  protection- 
ism, on  its  own  doctrines,  issues  in  the  impoverish- 
ment of  the  nation  and  in  failure  to  do  any  thing 
which  it  claims  to  do.  On  the  contrary,  an  ex- 
amination in  detail  of  its  means,  methods,  pur- 
poses and  plans  show  that  it  must  produce  waste 
and  loss,  so  that  if  it  were  true,  we  should  have  to 
believe  that  waste  and  loss  are  means  of  wealth. 
Now  I  tuin  about  to  attack  it  in  face,  on  an  open 
issue,  for  if  any  project  which  is  advocated  proves, 
upon  free  and  fair  examination,  to  be  based  an 
errors  of  fact  and  doctrine,  it  becomes  a  danger 
and  an  evil  to  be  exposed  and  combated,  and 
truth  of  fact  and  doctrine  must  be  set  against  it. 


TRADE  IS  HARMFUL.  67 

I.  PROTECTIONISM  INCLUDES  AND  NECESSARILY  CARRIES 
WITH  IT  HOSTILITY  TO  TRADE,  OR,  A  T  LEAST,  SUSPIC- 
ION A  GA  INS  T  TRA  DE. 

A.)  Rules  for  knoiving  when  it  is  Safe  to  Trade. 

63.  Every   protectionist    is    forced    to    regard 
trade  as  a  mischievous  or  at  least  doubtful  thing. 
Protectionists  have  even  tried   to  formulate  rules 
for  determining  when  trade  is  beneficial  and  when 
harmful. 

64.  It  has  been  said  that  we  ought  to  trade  only 
on    meridians   of   longitude,  not   on   parallels   of 
latitude. 

65.  It  has  been  affirmed  that  we  can  not  safely 
trade  unless  we  have  taxes  to  exactly  offset  the 
lower  wages  of  foreign  countries.     But  it   is  plain 
that  if  the  case  stands  so  that  an  American   em- 
ployer says  :  "  I  am  at  a  disadvantage  compared 
with  my  foreign  competitor,  because  he  pays  less 
wages  than  I," — then,  by   the   same  token,    the 
American  laborer  will  say :  "  I  am  at  an   advan- 
tage, compared  with  my  foreign  comrade,  for  I  get 
better  wages  than  he." — If  the  law  interferes  with 
the  state  of  things  so  that  the  employer  is  enabled 
to  say  :  "  I  am  now  at  less  disadvantage  in  com- 
petition with  my  foreign  rival,  because  I  do  not  now 


68  PROTECTIONISM. 

have  to  pay  as  much  more  wages  than  he  as  for- 
merly ;  " — then,  by  the  same  token,  the  American 
laborer  must  say :  "  I  am  not  now  as  much  bet- 
ter off  than  my  foreign  comrade  as  formerly,  for  I 
do  not  now  gain  as  much  more  than  he  as  I  did — 
there  is  not  now  as  much  advantage  in  emigrating 
to  this  country  as  formerly." — Therefore,  when- 
ever the  taxes  just  offset  the  difference  in  wages, 
they  just  take  aivay  from  the  American  laborer  all 
his  superiority  over  the  foreigner,  and  take  away 
all  reason  for  caring  to  come  to  this  country.  So 
much  for  the  laborer.  But  the  employer,  if  he  has 
arrested  immigration,  has  cut  off  one  source  of  the 
supply  of  labor,  tending  to  raise  wages,  and  is  at 
war  with  himself  again  (§  47). 

66.  It  has  been  said  that  two  nations  can  not 
trade  if  the  rate  of  interest   in  the  two  differs   by 
two  per  cent.     The  rate  of  interest  in  the  Atlantic 
States  and  in  the  Mississippi  valley  has  always 
differed  by  two  per   cent.,  yet  they  have   traded 
together  under  absolute  free  trade,  and  the  Mis- 
sissippi valley  has  had  to  begin  a  wilderness  and 
grow  up  to  the  highest  standard  of  civilization  in 
spite  of  that  state  of  things. 

67.  It  has  been  said  that  we  ought  to  trade  only 


WHO  ARE  OUR  "  INFERIORS"  ?  69 

with  inferior  nations.  The  United  States  does 
not  trade  with  any  other  nation,  save  when  it 
buys  territory.  A  in  the  United  States  trades 
with  B  in  some  foreign  country.  If  I  want 
caoutchouc  I  want  to  trade  with  a  savage  in  the 
forests  of  South  America.  If  I  want  mahogany 
I  want  to  trade  with  a  man  in  Honduras.  If  I 
want  sugar  I  want  to  trade  with  a  man  in  Cuba. 
If  I  want  tea  I  want  to  trade  with  a  man  in  China. 
If  I  want  silk  or  champagne  I  want  to  trade  with 
a  man  in  France.  If  I  want  a  razor  I  want  to 
trade  with  a  man  in  England.  I  want  to  trade 
with  the  man  who  has  the  thing  which  I  want  of 
the  best  quality  and  at  the  lowest  rate  of  exchange 
for  my  products.  What  is  the  definition  or  test 
of  an  "  inferior  nation/*  and  what  has  that  got  to 
do  with  trade  any  more  than  the  race,  language, 
color,  or  religion  of  the  man  who  has  the  goods? 

68.  If  trade  was  an  object  of  suspicion  and 
dread,  then  indeed  we  ought  to  have  rules  for  di$* 
tinguishing  safe  and  beneficial  trade  from  mischiev.- 
ous  trade,  but  these  attempts  to  define  and  dis- 
criminate only  expose  the  folly  of  the  suspicion, 
We  find  that  the  primitive  men,  who  dwelt  in 
caves  in  the  glacial  epoch,  carried  on  trade.  The 


70  PROTECTIONISM. 

earliest  savages  made  footpaths  through  the 
forests  by  which  to  traffic  and  trade,  winning 
thereby  'mutual  advantages.  They  found  that 
they  could  supply  more  wants  with  less  effort 
by  trade,  which  gave  them  a  share  in  the  natural 
advantages  and  acquired  skill  of  others.  They 
trained  beasts  of  burden,  improved  roads,  invent- 
ed wagons  and  boats,  all  in  order  to  extend  and 
facilitate  trade.  They  were  foolish  enough  to 
think  that  they  were  gaining  by  it,  and  did  not 
know  that  they  needed  a  protective  tariff  to  keep 
them  from  ruining  themselves.  Or,  why  does  not 
some  protectionist  sociologist  tell  us  at  what  stage 
of  civilization  trade  ceases  to  be  advantageous  and 
begins  to  need  restraint  and  regulation  ? 

B,)  Economic  Units  not  National  Units. 

69.  The  protectionists  say  that  their  system 
advances  civilization  inside  a  state  and  makes  it 
great,  but  the  facts  are  all  against  them  (see  §  136 
fg).  It  was  by  trade  that  civilization  was  extend- 
ed over  the  earth.  It  was  through  the  contact  of 
trade  that  the  more  civilized  nations  transmitted 
to  others  the  alphabet,  weights  and  measures, 
knowledge  of  astronomy,  divisions  of  time,  tools 


IT  IS  BLESSED  TO  GIVE  AND  TAKE.          71 

and  weapons,  coined  money,  systems  of  numera- 
tion, treatment  of  metals,  skins,  and  wool,  and  all 
the  other  achievements  of  knowledge  and  inven- 
tion which  constitute  the  bases  of  our  civilization. 
On  the  other  hand,  the  nations  which  shut  them- 
selves up  and  developed  an  independent  and  self- 
contained  civilization  (  China  and  Japan)  present 
us  the  types  of  arrested  civilization  and  stereo- 
typed social  status.  It  is  the  penalty  of  isolation 
and  of  withdrawal  from  the  giving  and  taking 
which  properly  bind  the  whole  human  race 
together,  that  even  such  intelligent  and  highly 
endowed  people  as  the  Chinese  should  find  their 
high  activity  arrested  at  narrow  limitations  on 
every  side.  They  invent  coin,  but  never  get 
beyond  a  cast  copper  coin.  They  invent  gun- 
powder but  can  not  make  a  gun.  They  invent 
movable  types,  but  only  the  most  rudimentary, 
book.  They  discover  the  mariner's  compass,  but 
never  pass  the  infancy  of  ship-building. 

70.  The  fact  is,  then,  that  trade  has  been  the  hand- 
maid  of  civilization.  It  has  traversed  national 
boundaries,  and  has  gradually,  with  improvement 
in  the  arts  of  transportation,  drawn  the  human 
race  into  closer  relations  and  more  harmonious 


72  PROTECTIONISM. 

interests.  The  contact  of  trade  slowly  saps  old 
national  prejudice  and  religious  or  race  hatreds. 
The  jealousies  which  were  perpetuated  by 
distance  and  ignorance  can  not  stand  before  con- 
tact and  knowledge.  To  stop  trade  is  to  arrest 
this  beneficent  work,  to  separate  mankind  into 
sections  and  factions,  and  to  favor  discord,  jeal- 
ousy, and  war. 

71.  Such  is  the  action  of  protectionism.  The  pro- 
tectionists make  much  of  their  pretended  "nation- 
alism," and  they  try  to  reason  out  some  kind  of 
relationship  between  the  scope  of  economic  forces 
and  the  boundaries  of  existing  nations.  The 
argumentation  is  fatally  broken  at  its  first  step. 
They  do  not  show  what  they  might  show,  viz., 
that  the  scope  of  economic  forces  on  any  given 
stage  of  the  arts,  does  form  economic  units.  An 
English  county  was  such  a  unit  a  century  ago. 
I  doubt  if  any  thing  less  than  the  whole  earth 
could  be  considered  so  to-day,  when  the  wool  of 
Australia,  the  hides  of  South  America,  the  cotton 
of  Alabama,  the  wheat  of  Manitoba  and  the  meat 
of  Texas  meet  the  laborers  in  Manchester  and 
Sheffield,  and  would  meet  the  laborers  in  Lowell 
and  Paterson,  if  the  barriers  were  out  of  the  way. 


THE  LA  TES  T  POLL  Y.  73 

But  what  the  national  protectionist  would  need  to 
show  would  be  that  the  economic  unit  coincides 
with  the  political  unit.  He  would  have  to  affirm 
that  Maine  and  Texas  are  in  one  economic  unit, 
but  that  Maine  and  New  Brunswick  are  not ;  or  that 
Massachusetts  and  Minnesota  are  in  one  economic 
unit,  but  that  Massachusetts  and  Manitoba  are 
not.  Every  existing  state  is  a  product  of  historic 
accidents.  Mr.  Jefferson  set  out  to  buy  the  city 
of  New  Orleans.  He  awoke  one  morning  to  find 
that  he  had  bought  the  western  half  of  the  Mis- 
sissippi valley.  Since  that  turned  out  so  the 
protectionists  think  that  Missouri  and  Illinois 
prosper  by  trading  in  perfect  freedom.*  If  it  had 
not  turned  out  so,  it  would  have  been  very  mis- 
chievous for  them  to  trade  in  perfect  freedom. 

*  Since  the  above  was  in  type,  I  have,  for  the  first  time,  seen 
an  argument  from  a  protectionist,  that  a  tariff  between  our  States 
is,  or  may  become,  desirable.  It  is  from  the  Chicago  Inter-Ocean, 
and  marks  the  extreme  limit  reached,  tip  to  this  time,  by  protec- 
tionist fanaticism  and  folly,  although  it  is  thoroughly  consistent, 
and  fairly  lays  bare  the  spirit  and  essence  ot  protectionism  : 

"  In  the  United  States  the  present  ominous  and  over-shadowing 
strike   in   the   iron  trade,  by   which  from  75.000  to  100,000  men 
have  been  thrown  out  of  work,  is  an  incisive  example  of  the  ten- 
dency of  this  country,  also,  to  a  condition  of  trade  which  will  com- 
Eel  individual  states  and  certain  sections  of   the  country  to  ask  for 
'gislation,  in  order  to  protect  them  against  the  cheaper  labor  and 
superior  natural  advantage  of  others  "     The   remedy  for  the  harm 
done  by  taxes  on  our  foreign  trade  is  to  lay  some  on  our  domestic 
trade.     (See  §26,  95.) 


74  PROTECTIONISM. 

Nova  Scotia  did  not  join  the  revolt  of  our  thirteen 
colonies.  Hence  it  is  thought  ruinous  to  let  coal 
and  potatoes  come  in  freely  from  Nova  Scotia, 
If  she  had  revolted  with  us,  it  would  have  beqn 
for  the  benefit  of  every  body  in  this  union  to  trade 
with  her  as  freely  as  we  now  trade  with  Maine. 
We  tried  to  conquer  Canada  in  1812-13  and  failed 
Consequently  the  Canadians  now  put  taxes  on 
pur  coal  and  petroleum  and  wheat,  and  we  put 
taxes  on  their  lumber,  which  our  coal  and  petro- 
leum industries  need.  We  did  annex  Texas,  at 
the  cost  of  war,  in  1845.  Consequently  we  trade 
with  Texas  now  under  absolute  freedom,  but,  if 
we  trade  with  Mexico,  it  must  be  only  very  care- 
fully and  under  stringent  limitations.  Is  this 
wisdom,  or  is  it  all  pure  folly  and  wrong  headed- 
ness,  by  which  men  who  boast  of  their  intelligence 
throw  away  their  own  chances  ?  * 

72.  Trade  is  a  beneficent  thing.  It  does  not 
need  any  regulation  or  restraint.  There  is  no 

*  Since  the  above  was  in  type,  a  treasury  order  has  subjected 
all  goods  from  Canada  to  the  same  taxes  as  imported  goods, 
although  they  may  be  going  from  Minnesota  to  England.  Nature 
has  made  man  too  well  off.  The  inhabitants  of  North  America 
will  not  simply  use  their  chances,  but  they  divide  into  two  artific- 
ial bodies  so  as  to  try  to  harm  each  other.  Millions  are  spent  to 
cut  an  isthmus  where  nature  has  left  one,  and  millions  more  to 
set  up  a  tax-barrier  where  nature  has  made  a  highway. 


TRADE  IS  BENEFICENT.  75 

point  at  which  it  begins  to  be  dangerous.  It  is 
mutually  beneficent.  If  it  ceases  to  be  so,  it 
ceases  entirely,  because  he  who  no  longer  gains  by 
it  will  no  longer  carry  it  on.  (See  §  125.) 

PROTECTIONISM  IS  AT  WAR  WITH  IMPROVEMENT. 

73.  The  cities  of  Japan  are  built  of   very   com- 
bustible   material,  and  when   a  fire   begins  it  is 
rarely  arrested  until  the  city  is  destroyed.    It  was 
suggested  that  a  steam    fire-engine   would  there 
reach  its  maximum  of  utility.     One  was  imported 
and    proved  very    useful    on    several    occasions. 
Thereupon  the   carpenters  got    up  a  petition  to 
the  government  to  send  the  fire-engine  away,  be- 
cause it  ruined  their  business. 

74.  The  instance  is  grotesque  and  exaggerated, 
but  it  is  strictly  true  to  the  principle  of  protec- 
tionism.    The  southern  counties  of   England,  a 
century     ago,    protested    against    the     opening 
of   the  great    northern    turnpike,    because   that 
would     bring    the     products    of    the    northern 
counties  to   the    London  market,  of   which  the 
southern  counties  had  had   a   monopoly.     After 
the  St.  Gothard  tunnel  was  opened  the  people  of 
southern  Germany  petitioned  the  Government  to 
lay  higher  taxes  on  Italian  products  to  offset  the 


76  PROTECTIONISM. 

cheapness  which  the  tunnel  had  produced.  In 
1837  the  first  two  steamers  which  ever  made  com- 
mercial voyages  across  the  Atlantic  arrived  at  the 
same  time.  A  grand  celebration  was  held  m  New 
York.  The  foolish  people  rejoiced  as  if  a  new 
blessing  had  been  won.  Man  had  won  a  new1 
triumph  over  nature.  What  was  the  gain  of  it  ? 
It  was  that  he  could  satisfy  his  needs  with  less" 
labor  than  before ;  or,  in  plain  language,  get  things 
cheaper.  But  in  1842  a  Home  Industry  Conven- 
tion was  held  in  New  York,  at  which  it  was  alleged 
as  the  prime  reason  why  more  taxes  were  needed, 
that  this  steam  transportation  had  made  things 
cheap  here.*  Taxes  were  needed  to  neutralize  the 
improvement. 

A.)  Taxes  to  offset  Cheapened  Transportation, 

75.  For  the  last  twenty-five  years,  to  go  no 
further  back,  we  have  multiplied  inventions  to 
facilitate  transportation.  Ocean  cables,  improved 
marine  engines,  and  screw  steamers,  etc.,  etc., 
have  been  only  improved  means  of  supplying  the 
wants  of  people  on  two  continents  more  abund- 
antly with  the  products  each  of  the  other.  The 

*  62,  Niles's  Register,  132. 


ARTS  VERSUS  TAXES.  77 

scientific  journals  and  the  daily  papers  boast  of 
every  step  in  this  development  as  a  thing  to  be 
proud  of  and  rejoice  in,  but  in  the  mean  time 
the  legislators  on  both  sides  of  the  water  are. hard 
at  work  to  neutralize  it  by  taxation.  We,  in 
the  United  States,  have  multiplied  monstrous 
taxes  on  all  the  things  which  others  make  and 
which  we  want,  to  prevent  them  from  being 
brought  to  us.  The  statesmen  of  the  European 
continent  are  laying  taxes  on  our  meat  and  wheat, 
lest  they  be  brought  to  their  people.  The  arts 
are  bringing  us  together;  the  taxes  are  needed  to 
keep  us  apart.  In  France,  for  instance,  the  agri- 
culturist complains  of  American  competition — not 
"  pauper  labor,"  but  gratuitous  soil  and  sunlight. 
He  does  not  want  the  French  artisan  to  have  the 
benefit  of  our  prairie  soil.  The  government  yields 
to  him  and  lays  a  tax  on  our  meat  and  wheat. 
This  raises  the  price  of  bread  in  Paris,  where  the 
reconstruction  of  the  city  has  collected  a  large 
artisan  population.  The  government  then  finds 
itself  driven  to  fix  the  price  of  bread  in  Paris  to 
keep  it  down.  But  the  reconstruction  of  the  city 
was  accomplished  by  contracting  a  great  debt, 
which  means  heavy  taxes.  These  taxes  drive  the 


7  8  PRO  TECTIONISM. 

population  out  into  the  suburbs.  At  least  one 
voice  has  been  raised  by  an  owner  of  city  property 
that  a  tax  ought  to  be  laid  on  suburban  residents  to 
drive  them  back  to  the  city,*  and  not  let  them  es- 
cape the  efforts  of  the  city-landlord  to  throw  his 
taxes  on  them.  Then,  again,  France  has  been 
subsidizing  ships,  and  when  the  question  of  re- 
newing the  subsidy  came  up,  it  was  argued  that 
the  ships  subsidized  at  the  expense  of  the  French 
tax-payer  had  lowered  freight  on  wheat  and  made 
wheat  cheap  ;  that  is,  as  somebody  justly  replied, 
had  wrought  the  very  mischief  against  which  the 
increased  tax  had  just  been  demanded  on  wheat. 
Therefore  the  tax-payer  had  been  taxed  first  to 
make  wheat  cheap,  and  then  again  to  make  it 
dear. 

76.  Tax  A  to  favor  B.  If  A  complains,  tax  C 
/to  make  it  up  to  A.  If  C  complains,  tax  B  to 
favor  C.  If  any  of  them  still  complain,  begin  all 
over  again.  Tax  them  as  long  as  any  body  com- 
plains, or  any  body  wants  any  thing.  This  is  the 
statesmanship  of  the  last  quarter  of  the  nineteenth 
century. 
^ 

*  Journal  des  Economistes,  March,  1885,  pagq  496. 


THE  MANIA  FOR  COLONIES.  79 

77.  Bismarck,  too,  is   going  into  the  business. 
He  has  to  rule  a  people  who  live  on  a  poor  soil, 
and  have  to  bear  a  crushing  military  system.     The 
consequence  is  that  the   population  is  declining. 
Emigration  exceeds  the  natural   increase.      Bis- 
marck's cure  for  it  is  to  lay  protective  taxes  against 
American    pork  and  wheat  and    rye.     This  will 
protect  the  German  agriculturist.      If  it  lowers 
still  more  the  comfort  of  the  buyers  of  food,  and 
drives  more  of  them  out  of  the  country,  then  he 
will  go  and  buy  or  fight  for  colonies  at  the  expense 
of  the  German  agriculturists  whom  he  has  just 
"  protected/'  although   the  surplus  population  of 
Germany  has  been  taking  itself  away  for  thirty 
years  without    asking    help    or    giving  trouble. 
What  can  Germany  gain  by  diverting  her  emi- 
grants to  her  own  colony  unless  she  means  to 
bring   the   able-bodied    men    back   to    fight    her 
battles  ?     If  she  means  that,  the  emigrants  will 
not  go  to  her  colony. 

78.  France  is  also   reviving   the  old    colonial 
policy  with  discriminating   favors    and    compen- 
satory restraints.     She  already  owns  a  possession 
in  Algeria,  which  is  the  best  example  of  a  colony 
for  the  sake  of  a  colony.     It  has  been  asserted  in 


8o  PRO  TECTIONISM* 

the  French  Chambers  that  each  French  family 
now  in  Algeria  has  cost  the  Government  (i.e.,  the 
French  taxpayer)  25,000  francs.*  The  longing 
of  these  countries  for  "  colonies  "  is  like  the  longing 
of  a  negro  dandy  for  a  cane  or  a  tall  hat  so  as  to 
be  like  the  white  gentlemen. 

.B.)  Sugar  Bounties. 

79.  The  worst  case  of  all,  however,  is  sugar. 
The  protectionists  long  boasted  of  beet-root  sugar 
as  a  triumph  of  their  system.  It  is  now  an  in- 
dustry in  which  an  immense  amount  of  capital  is 
invested  on  the  Continent,  but  cheap  transporta- 
tion for  cane  sugar,  and  improvements  in  the 
treatment  of  the  latter,  are  constantly  threatening 
it.  Mention  is  made  in  Bradstreefs  for  June  28, 
1885,  of  a  very  important  improvement  in  the 
treatment  of  cane  which  has  just  been  invented 
at  Berlin.  Germany  has  an  excise  tax  on  beet- 
root sugar,  but  allows  a  drawback  on  it  when 
exported  which  is  greater  than  the  tax.  This 
acts  as  a  bounty  paid  by  the  German  tax-payer  on 
the  exportation.  Consequently,  beet-root  sugar 

*  Paris  correspondent  of  the  New  York  Evening  Post, 
February  9,  1884. 


THE  IND  US TR  Y  VERSUS  THE  SUGAR.         81 

has  appeared  even  in  our  market.  The  chief 
market  for  it,  however,  is  England.  The  conse- 
quence is  that  the  sugar  which  is  nine  cents  a  pound 
in  Germany,  and  seven  cents  a  pound  here,  is 
five  cents  a  pound  in  England,  and  that  the  annual 
consumption  of  sugar  per  head  in  the  three  coun- 
tries* is  as  follows  :  England,  67^  pounds  ;  United 
States,  51  pounds;  Germany,  12  pounds.  I  some- 
times find  it  difficult  to  make  people  understand 
the  difference  between  wanting  an  "  industry " 
and  wanting  goods,  but  this  case  ought  to  make 
that  distinction  clear.  Obviously  the  Germans  have 
tJie  industry  and  the  Englishmen  have  the  sugar. 

So.  No  sooner,  however,  does  Germany  get  her 
export  bounty  in  good  working  order  than  the 
Austrian  sugar  refiners  besiege  their  government 
to  know  whether  Germany  is  to  have  the 
monopoly  of  giving  sugar  to  the  Englishmen. f 
They  get  a  bounty  and  compete  for  that  privilege. 
Then  the  French  refiners  say  that  they  can  not 

*  Economist^  Commercial  Review,  1884,  p.  15. 

f  The  Vienna  correspondent  of  the  Economist  writes,  June  15, 
1885,  ' '  The  representatives  of  the  sugar  trade  addressed  a  petition 
to  the  Finance  Minister,  asking,  above  all  things,  that  the  pre- 
mium on  export  should  be  retained,  without  which,  they  say,  they 
can  not  continue  to  exist,  and  which  is  granted  in  all  countries 
where  beet  root  sugar  is  manufactured." 


82  PROTECTIONISM. 

compete,  and  must  be  enabled  to  compete  in 
giving  sugar  to  the  Englishmen.  I  believe  that 
their  case  is  under  favorable  consideration. 

80^.  I  have  found  it  harder  (as  is  usually  the 
case)  to  get  recorded  information  about  the  trade 
and  industry  of  our  own  country  than  about  those 
of  foreign  nations.  However,  we  too,  although 
we  do  not  raise  beet-sugar,  have  our  share  in  this 
bounty  folly,  as  may  be  seen  by  the  following 
statement,  which  comes  to  hand  just  in  time  to 
serve  my  purpose.*  "  The  export  of  refined 
sugar  [from  the  United  States]  is  entirely  con- 
fined to  hard  sugars,  or,  to  be  more  explicit,  loaf, 
crushed  and  granulated.  This  is  because  the 
drawback  upon  this  class  of  sugar  is  so  large  that, 
refiners  are  enabled  to  sell  them  at  less  than  cost. 
The  highest  collectable  duty  upon  sugar  testing 
as  high  as  99°  is  but  2.36,  but  the  drawback  upon 
granulated  testing  the  same,  and  in  the  case  of 
crushed  and  loaf  less,  is  2.82  less  I  per  cent.  This 
is  exactly  43c.  per  one  hundred  pounds  more  than 
the  government  receives  in  duty.  But  it  rarely 
happens  that  raw  sugar  is  imported  testing  99°, 

*  Brads  tree?  s,  July  25,  1885. 


WHA  T  WE  GIVE.  83 

and  never  for  refining  purposes.  The  following 
table  gives  the  rates  of  duty  upon  the  average 
grades  used  in  refining : 

Degrees.  Duly. 

Fair  refining  testing 89  1.96 

Fair  refining  testing go  2.00 

Centrifugal  testing 96  2  28 

Beet  sugar  testing 88  1 . 92 

It  will  be  clearly  seen  from  the  above  figures  that 
with  a  net  drawback  upon  hard  sugar  of  2.79  our 
refiners  are  able  to  sell  to  foreigners,  through  the 
assistance  of  our  treasury,  sugar  at  less  than  cost. 
Taking  for  instance  the  net  price  of  centrifugal 
testing  only  97°  and  the  net  price  less  drawback 
of  granulated  : 

Certrifugal  raw  sugar  testing  97° 6.00 

Less  duty 2.28 

Net 3 . 72 

Granulated  refined  testing  99° 6  37^ 

Less  drawback 2.71 

Net 3-66^2 


Nothing  could  demonstrate  the  absurdity  of  the 
present  rate  of  drawback  more  clearly  than  the 
above.  A  refiner  pays  6^c.  per  hundred  more 
for  raw  sugar  testing  2°  less  saccharine  than  he 
sells  refined  for.  Not,  however,  to  the  American 


84  PROTECTIONISM. 

consumers,  but  to  foreigners.  After  paying  the 
expenses  necessary  to  refining  by  the  assistance 
of  a  drawback,  which  clearly  amounts  to  a  sub- 
sidy of  about  5oc.  a  hundred  pounds,  our  large 
sugar  monopolists  are  assisted  by  the  government 
to  increase  the  cost  of  sugar  to  American  con- 
sumers.  One  firm  controls  almost  the  entire 
trade  of  the  east ;  at  all  events  it  is  safe  to  say 
that  the  trade  of  the  entire  country  is  controlled 
by  three  firms,  and  the  treasury  assists  this 
monopoly  in  sustaining  prices  against  the  interest 
of  the  country  at  large.  Up  to  date  the  exports 
of  refined  sugar  have  amounted  to  83,340  tons, 
which  taken  at  5oc.  a  hundred  has  cost  the  treas- 
ury over  $830,000.  All  this  may  not  have  gone 
into  the  pockets  of  the  refiners,  as  the  shipowners 
have  obtained  a  share,  but  the  fact  remains  that 
the  treasury  is  the  loser  by  this  amount.  Besides 
this  bounty  presses  hard  upon  the  consumers. 
They  not  only  have  to  pay  the  tax,  but  during 
the  late  rise  they  were  compelled  to  pay  more  for 
their  sugar  than  they  otherwise  would  have  done 
had  not  the  export  demand  caused  by  selling 
sugar  to  foreigners  at  less  than  cost,  the  treasury 
paying  the  difference,  increased  prices.  While  an 


A  REAL  TARIFF  COMMISSION.  85 

American  consumer  is  charged  6j^c.  for  granu- 
lated, foreign  buyers,  through  the  liberality  of 
our  government,  can  buy  it  under  3^c.  Cer- 
tainly it  is  time  that  the  Secretary  of  the  Treas- 
ury asked  the  sugar  commission  to  commence  a 
comprehensive  and  impartial  inquiry." 

81.  Of  course  the  story  would  not  be  complete 
if  the  English  refiners  did  not  besiege  their 
government  for  a  tax  to  keep  out  this  maleficent 
gift  of  foreign  tax-payers.  This,  say  they,  is 
not  free  trade.  This  is  protection  turned  the 
other  way  around.  We  might  hold  our  own 
on  an  equal  footing,  but  we  can  not  contend 
against  a  subsidized  industry.  A  superficial 
thinker  might  say  that  this  protest  was  conclusive. 
The  English  government  set  on  foot  an  inves- 
tigation, not  of  the  sugar  refining,  but  of 
those  other  interests  which  were  in  danger  of 
being  forgotten.  There  was  a  tariff  investigation 
which  was  worth  something  and  was  worthy  of  an 
enlightened  government.  It  was  found /that  the 
consumers  of  sugar  had  gained  more  than  all  the 
wages  paid  in  sugar  refining.  But,  on  the  side  of 
the  producers,  it  was  found  that  6,000  persons  are 
employed  and  45,000  tons  of  sugar  are  used 


86  PROTECTIOAflSM. 

annually  in  the  neighborhood  of  London  in  manu- 
facturing jam  and  confectionery.  In  Scotland 
there  are  eighty  establishments,  employing  over 
4,000  people  and  using  35,000  tons  of  sugar  per 
annum  in  similar  industries.  In  the  whole  United 
Kingdom,  in  those  industries,  100,000  tons  of  sugar 
are  used  and  12,000  people  are  employed,  three 
times  as  many  as  in  sugar  refining.  Within  twenty 
years  the  confectionery  trade  of  Scotland  has 
quadrupled  and  the  preserving  trade — jam  and 
marmalade — has  practically  been  originated.  In 
addition,  refined  sugar  is  a  raw  material  in  biscuit 
making  and  the  manufacture  of  mineral  waters, 
and  50,000  tons  are  used  in  brewing  and  distilling. 
Hence  the  Economist  argues  (and  this  view  seems 
to  have  controlled  the  (decision) :  "  It  may  be 
that  the  gain  which  we  at  present  realize  from  the 
bounties  may  not  be  enduring,  as  it  is  impossible 
to  believe  that  foreign  nations  will  go  on  taxing 
themselves  to  the  extent  of  several  millions  a  year 
in  order  to  supply  us  and  others  with  sugar  at  less 
than  its  fair  price,  but  that  is  no  reason  for  refus- 
ing to  avail  ourselves  of  their  liberality  so  long  as 
it  does  last/'  *  (See  §  83,  note.) 

*  Economist,  1884,  p.  1052. 


THE  LOST  INDUSTRIES.  87 

82.  One  point  in  this  case  ought  not  to  be  lort 
sight  of.     If  the  English  government  had  yielded 
to  the  sugar   refiners  without  looking  further,  all 
these  little  industries  which  are  mentioned,  and 
which  in  their  aggregate  are  so  important,  would 
have   been  crushed  out.      Ten   years  later   they 
would  have  been   forgotten.     It  is  from  such  an 
example  that  one  must  learn  to  form  a  judgment 
as  to  the  effect  of  our  tariff  in  crushing  out  indus- 
tries which  are  now  lost  and  gone,  and  can  not 
even  be  recalled  for  purposes  of  controversy,  but 
which  would   spring  into  existence  again   if  the 
repeal  of  the  taxes  should  give  them  a  chance. 

83.  On   our  sideothe  water   efforts  have  been 
made  to  get  us  into  the  sugar  struggle  by  the  pro- 
posed commercial  treaties  with  Spain  and  England, 
which  would   in    effect  have    extended  our  pro- 
tective tariff  around    Cuban    and   English  West 
Indian   sugar.*      The    sugar    consumers    of    the 
United  States  were  to  pay  to  the  Cuban  planters 
the  twenty-five  million  dollars  revenue  which  they 

*  A  friend  has  sent  me  a  report  (Barbados  Agricultural 
Reporter,  April  24,  1885),  of  an  indignation  meeting  at  Bridge- 
town to  protest,  because  the  English  Government  refused  to  ratify 
the  commercial  treaty  with  the  United  States.  rl  he  islanders  feel 
the  competition  of  the  '*  bounty-fed  "  su'gar  in  the  English  mar- 
ket ;  a  new  complication,  a  new  mischief. 


88  PROTECTIONISM. 

now  pay  to  the  treasury  on  Cuban  sugar,  on  con- 
dition that  the  Cubans  should  bring  back  part  of 
it  and  spend  it  among  our  manufacturers.  It 
was  a  new  extension  of  the  plan  of  taxing  some 
of  us  for  the  benefit  of  others  of  us.  Let  it  be 
noticed,  too,  that  when  it  suited  their  purpose, 
the  protectionists  were  ready  to  sacrifice  the 
sugar  industry  of  Louisiana  without  the  least 
concern.  We  have  been  trying  for  twenty-five 
years  to  secure  the  home  market  and  keep  every 
body  else  out  of  it.  As  soon  as  we  get  it  firmly 
shut,  so  that  nobody  else  can  get  in,  we  find  that  it 
is  a  question  of  life  and  death  zvitk  us  to  get  out 
ourselves.  The  next  device  is  to  tax  Americans 
in  order  to  go  and  buy  a  piece  of  the  foreign 
market.  At  the  last  session  of  Congress  Senator 
Cameron  proposed  to  allow  a  drawback  on  raw 
materials  used  in  exported  products.  On  that 
plan  the  American  manufacturer  would  have  two 
costs  of  production,  one  when  he  was  working  for 
the  home  market,  and  another  much  lower  one 
when  working  for  the  foreign  market.  As  it  is 
now,  the  exports  of  manufactured  products,  of 
which  so  much  boasting  is  heard,  are  for  the  most 
part  articles  sold  abroad  lower  than  here  so  as  not 


INTERNATIONAL  GIFT-MAKING.  89 

to  break  down  the  home  monopoly  market.  The 
proposed  plan  would  raise  that  to  a  system,  and 
we  should  be  giving  more  presents  to  foreigners, 

84.  To  return  to  sugar,  our   treaty  with  the 
Sandwich  Islands  has   produced  anomalous  and 
mischievous  results  on  the  Pacific  coast.     In  the 
southern  Pacific  New  Zealand  is  just  going  into 
the  plan   of  bounties  and  protection  on  sugar.* 
It  would  not,  therefore,  be  very  bold  to  predict  a 
world-wide    catastrophe    in   the    sugar    industry 
within  five  years. 

85.  Now  what    is  it   all    for?     What   is  it    all 
about?  Napoleon  Bonaparte  began  it  in  a  despotic 
whim,  when  he  determined  to  force  the  produc- 
tion of  beet  root  sugar  to  show  that  he  did  not 
care  for  the  supremacy  of  England  at  sea  which 
cut  him  off  from  the  sugar  islands.     In  order  not 
to  lose  the  capital  engaged  in   the  industry,  pro- 
tection   was    continued.     But    this    led    to   put- 
ting more  capital  into  it  and  further  need  of  pro- 
tection.    The  problem  has  tormented  financiers 
for   seventy-five  years.      There    are    two    natural 
products  of  which  the  cane  is  far  richer  in  sugar. 
But  the  processes  of  the  beet-sugar  industry  have 

*  Economist,  Commercial  Supplement,  Feb.  14,  1885,  p.  7. 


po  PROTECTIONISM. 

been  improved,  until  recently,  far  more  rapidly 
than  those  of  the  cane  industry.  Then  the  refin- 
ing is  a  separate  interest.  If  then  a  country  has 
cane-sugar  colonies  which  it  wants  to  protect 
against  other  colonies,  and  a  beet-sugar  industry 
which  it  wants  to  protect  against  neighbors  who 
produce  beet-sugar,  and  refiners  to  be  protected 
against  foreign  refiners,  and  if  the  relations  of  its 
own  colonial  cane-sugar  producers  to  its  own 
domestic  beet-sugar  producers  must  be  kept 
satisfactorily  adjusted,  in  spite  of  changes  in  pro- 
cesses, transportation  and  taxation,  and  if  it 
wants  to  get  a  revenue  from  sugar,  and  to  use  the 
colonial  trade  to  develop  its  shipping,  and  if  it  has 
two  or  three  commercial  treaties  in  which  sugar  is 
an  important  item,  the  statesman  of  that  country 
has  a  task  like  that  of  a  juggler  riding  several 
horses  and  keeping  several  balls  in  motion.  Sugar 
is  the  commodity  on  which  the  effects  of  a  world- 
embracing  commerce,  produced  by  modern  inven- 
tions, are  most  apparent,  and  it  is  the  commodity 
through  which  all  the  old  protectionist  anti-com- 
mercial doctrines  will  be  brought  to  the  most 
decisive  test. 


FIGHTING  OUR   IV A  Y  OUT,  91 

C.)  Forced  Foreign  Relations  to  Regulate  Im- 
provement 'which  can  no  Longer  be  l)efeate<l. 

86.  If  we  turn  back  once  more  to  our  own  case 
we  note  the  rise  in  1883-4  of  the  policy  of  com- 
mercial treaties,  and  of  a  "  vigorous  foreign 
policy."  For  years  a  "  national  policy "  for  us 
has  meant  "  securing  the  home  market."  The 
perfection  of  this  policy  has  led  to  isolation  and 
ostentatious  withdrawal  from  cosmopolitan  inter- 
ests. I  may  say  that  I  do  not  write  out 
of  any  sympathy  with  vague  humanitarianism 
or  cosmopolitan  sentiments.  It  seems  to  me  that 
local  groupings  have  great  natural  strength  and 
obvious  utility  so  long  as  they  are  subdivisions 
of  a  higher  organization  of  the  human  race,  or  so 
long  as  they  are  formed  freely  and  their  relations 
to  each  other  are  developed  naturally.  But  now 
suddenly  rises  a  clap-trap  demand  for  a  "  national 
policy,"  which  means  that  we  shall  force  our  way 
out  of  our  tax-created  isolation  by  diplomacy  or 
war.  The  effort,  however,  is  to  be  restrained  care- 
fully and  arbitrarily  to  the  western  hemisphere, 
and  we  have  anxiously  disavowed  any  part  or  lot 
in  the  regulation  of  the  Congo,  although  we 
shall  certainly  some  day  desire  to  take  our 


9*  PROTECTIONISM. 

share  in  the  trade  of  that  district.  Our  statesmen, 
however,  if  they  are  going  to  let  us  have  any 
foreign  trade,  can  not  bear  to  let  us  go  and  take  it 
where  we  -shall  make  most  by  it.  They  must 
draw  a  priori  lines  for  it.  They  have  taxed  us  in 
order  to  shut  us  up  at  home.  This  has  killed  the 
carrying  trade,  fox,  if  we  decided  not  to  trade, 
what  could  the  shippers  find  to  do  ?  Next  ship- 

t.  building  perished,  for  if  there  was  no  carrying 
trade  why  build  ships,  especially  when  the  taxes  to 
protect  manufactures  were  crushing  ships  and  com- 
merce ?  (§  101).  Next  the  navy  declined,  for  with 

,-  no  commerce  to  protect  at  sea,  we  need  no  navy. 
Next  we  lost  the  interest  which  we  took  thirty 
years  ago  in  a  canal  across  the  isthmus,  because 
we  have  now,  under  the  no-trade  policy,  no  use 
for  it.  Next  diplomacy  became  a  sinecure,  for 
we  have  no  foreign  relations. 

87.  Now  comes  the  "  national  policy,"  not 
because  it  is  needed,  but  as  an  artificial  and 
inflated  piece  of  political  bombast.  We  are  to 
galvanize  our  diplomacy  by  contracting  commer- 
cial treaties,  and  meddling  in  foreign  quarrels. 
No  doubt  this  will  speedily  make  a  navy  neces- 
sary. In  fact  our  proposed  "  American  policy " 


THE  CAST-OFF  JOHN  BULL  POLICY.          $$ 

is  only  an  old,  cast-off,  eighteenth  century,  John 
Bull  policy,  which  has  forced  England  to  keep  up 
a  big  army,  a  big  navy,  heavy  debt,  heavy  taxes, 
and  a  constant  succession  of  little  wars.  Hence 
we  shall  be  taxed  some  more  to  pay  for  a  navy. 
Then  it  is  proposed  to  tax  us  some  more  to  pay 
for  canals  through  which  the  navy  can  go.  Then 
we  are  to  be  taxed  some  more  to  subsidize  mer- 
chant ships  to  go  through  the  canal.  Then  we 
are  to  be  taxed  some  more  to  subsidize  voy- 
ages, i  e.,  the  carrying  trade.  Then  we  are  to  be 
taxed  some  more  to  provide  the  ships  with 
cargoes  (§  83). 

88.  All  this  time,  the  whole  West  Indian,  Mex- 
ican, and  Central  and  South  American  trade  is 
ours  if  we  will  only  stand  out  of  the  way  and  let 
it  come.  It  is  ours  by  all  geographical  and  com- 
mercial advantage,  and  would  have  been  ours 
since  1825  if  we  had  but  taken  down  the  barriers. 
Instead  of  that  we  propose  to  tax  ourselves  some 
more  to  lift  it  over  the  barriers.  Take  the  taxes 
off  goods,  let  exchange  go  on,  and  the  carrying 
trade  comes  as  a  consequence.  If  we  have  goods 
to  carry,  we  shall  build  or  buy  ships  in  which  to 
cany  them.  If  we  have  merchant  ships,  we  shall 


94  PROTECTIONISM. 

need  and  shall  keep  up  a  suitable  navy.  If  we 
need  canals,  we  shall  build  them,  as,  in  fact,  pri- 
vate capital  is  now  building  one  and  taking  the 
risk  of  it.  It  we  need  diplomacy  we  shall  learn 
and  practice  diplomacy  of  the  democratic,  peace- 
ful, and  commercial  type. 

89.  Thus,  under  the  philosophy  of  protection- 
ism, the  very  same  thing,  if  it  comes  to  us  freely 
by  the  extension  of  commerce  and|  the  march  of 
improvement,  is  regarded  with  terror,  while,  if  we 
can  first  bar  it  out,  and  then  only  let  a  little  of  it 
in  at  great  cost  and  pains,  it  is  a  thing  worth 
fighting  for.  Such  is  the  fallacy  of  all  commer- 
cial treaties.  The  crucial  criticism  on  all  the 
debates  at  Washington  in  1884-5  was  :  Have  these 
debaters  made  up  their  minds  to  any  standard  by 
which  to  measure  what  you  get  and  what  you  give 
under  a  commercial  treaty? — It  was  plain  that 
they  had  not.  A  generation  of  protectionism  has 
taken  away  the  knowledge  of  what  trade  is 
(§§  125,  139),  and  whence  its  benefits  arise,  and 
has  created  a  suspicion  of  trade  (§  63,  fg).  Hence 
when  our  public  men  came  to  compare  what  we 
should  get  and  what  we  should  give,  they  set 
about  measuring  this  by  things  which  were 


WHETHER  IT  IS  A  GOOD  BARGAIN.  95 

entirely   foreign    to   it.     Scarcely   two   of    them 

i 
agreed  as  to  the  standards  by  which  to  measure 

it.  Some  thought  that  it  was  the  number  of  peo- 
ple in  one  country  compared  with  the  number  in 
the  other.  Others  thought  that  it  wras  the 
amount  sold  to  as  compared  with  the  amount 
bought  from  the  country  in  question.  Others 
thought  that  it  was  the  amount  of  revenue  to  be 
sacrificed  by  us  as  compared  with  the  amount 
which  would  be  sacrificed  by  the  other  party.  If 
any  one  will  try  to  establish  a  standard  by  which 
to  measure  the  gain  by  such  a  treaty  to  one 
party  or  the  other,  he  will  be  led  to  see  the  fal- 
lacy of  the  whole  procedure.  The  greatest  gain 
to  both  would  be  if  the  trade  were  perfectly  free. 
If  it  is  obstructed  more  or  less,  that  is  a  harm  to 
be  corrected  as  far  and  as  soon  as  possible.  If 
then  either  party  lowers  its  own  taxes,  that  is  a 
gain  and  a  movement  toward  the  desirable  state 
of  things.  No  state  needs  any  body's  permission 
to  lower  its  own  taxes,  and  entanglements  which 
would  inpair  its  fiscal  independence  would  be  a  new 
harm.* 


*  Since  the  above  was  in  type,  a  report  from  the  "  South  Amer- 
ican Commission  "  has  been  received  and  published.     This  Com- 


96  PROTECTIONISM. 

t/  90.  Protectionism,  therefore,  is  at  war  with  im- 
provement. It  is  only  useful  to  annul  and  offset 
the  effects  of  those  very  improvements  of  which 
we  boast.  In  time,  the  improvements  win  power 
so  great  that  protectionism  can  not  withstand 
them.  Then  it  turns  about  and  tries  to  control  and 
regulate  them  at  great  expense  by  diplomacy  or  war. 


mission  submitted  certain  propositions  to  the  President  of  Chili  on 
behalf  of  the  United  States.  The  report  says  : 

11  The  second  proposition  involved  the  idea  of  a  reciprocal  com- 
mercial treaty  between  the  two  countries  under  which  special  pro- 
ducts of  each  should  be  admitted  free  of  duty  into  the  other  when 
carried  under  the  flag  of  either  nation.  This  did  not  meet  with 
any  greater  favor  with  President  Santa  Maria,  who  was  not  dis- 
posed to  make  reciprocity  treaties.  His  people  were  at  liberty  to 
sell  where  they  could  get  the  best  prices  and  buy  where  goods  were 
the  cheapest.  In  his  opinion  commerce  was  not  aided  by  commer- 
cial treaties,  and  Chili  neither  asked  from  nor  gave  to  other  nations 
especial  favors.  Trade  would  regulate  itself,  and  there  was  no 
advantage  in  trying  to  divert  it  in  one  direction  or  the  other.  So  far 
as  the  United  States  was  concerned,  there  could  be  very  little  trade 
with  Chili,  owing  to  the  fact  that  the  products  of  the  two  countries 
were  almost  identical.  Chili  produced  very  little  that  we  wanted, 
and  although  there  were  many  industrial  products  of  the  United 
States  that  were  used  in  Chili,  the  merchants  of  the  latter  country 
must  be  allowed  to  buy  where  they  sold  and  where  they  could 
trade  to  the  greatest  advantage.  With  reference  to  the  provision 
that  reduced  duties  should  be  allowed  only  upon  goods  carried  in 
Chilian  or  American  vessels,  he  said  that  Chili  did  not  want  any 
such  means  to  encourage  her  commerce  :  her  ports  were  open  to  all 
the  vessels  of  the  world  upon  an  equality,  and  none  should  have 
especial  privileges."  —  (N.  Y.  Times,  July  3,  1885.) 

If  this  is  a  fair  specimen  of  the  political  and  economic  enlighten- 
ment which  prevails  at  the  other  end  of  the  American  Continent, 
it  is  a  great  pity  that  the  "  Commission  "  is  not  a  great  deal  larger. 
They  are  like  the  illiterate  missionaries  who  found  themselves  un- 
awares in  a  theological  seminary.  We  would  do  well  to  send  our 
whole  Congress  out  there. 


WHAT  THE  WAGES  SYSTEM  IS.  97 

The  greater  and  more  world-wide  these  improve- 
ments are,  the  more  numerous  are  the  efforts  in 
different  parts  of  the  world  to  revive  or  extend 
protection.  No  doubt  there  is  loss  and  incon- 
venience in  the  changes  which  improvement  brings 
about.  A  notable  case  is  the  loss  and  inconven- 
ience of  a  laborer  where  a  machine  is  first  intro- 
duced to  supplant  him.  Patient  endurance  and 
hope,  in  the  confidence  that  he  will  in  the  end  be 
better  off,  has  long  been  preached  to  him.  It  is 
true  that  he  will  be  better  off,  but  why  not  apply 
the  same  doctrine  in  connection  with  the  other  in- 
conveniences of  improvement,  where  it  is  equally 
true? 

3.  PROTECTION  LOWERS  WAGES. 

91.  On  a  pure  wages  system,  that  is,  where  there 
is  a  class  who  have  no  capital  and  no  land,  wages 
are  determined  by  supply  and  demand  of  labor. 
The  demand  for  labor  is  measured  by  the  capital 
in  hand  to  pay  for  it  just  as  the  demand  for  any 
thing  else  is  measured  by  the  supply  of  goods 
offered  in  exchange  for  it.  In  Cobden's  language  : 
"  When  two  men  are  after  one  boss,  wages  are  low ; 
when  two  bosses  are  after  one  man,  wages  are 
high." 


98  PROTECTIONISM. 

A.)  No  True  Wages  Class  in  the  United  States. 

92.  The  United  States,  however,  have  never  yet 
been  on  a  pure  wages  system  because  there  is  no 
class  which  has  no  land  or  can  not  get  any.  In 
fact,  the  cheapening  of  transportation  which  is 
going  on  is  making  the  land  of  this  continent, 
Australia,  and  Africa,  available  for  the  laborers  of 
Europe,  and  is  breaking  down  the  wages  system 
there.  This  is  the  real  reason  for  the  rise  of  the 
proletariat  and  the  expansion  of  democracy  which 
are  generally  attributed  to  metaphysical,  senti- 
mental, or  political  causes.  A  man  who  has  no 
capital  and  no  land  can  not  live  from  day  to  day 
except  by  getting  a  share  in  the  capital  of  others 
in  return  for  services  rendered.  In  an  old  society 
or  dense  population,  such  a  class  comes  into  exist- 
ence. It  has  no  reserves;  no  other  chances  ;  no 
other  resource.  In  a  new  country  yio  such  class 
exists.  The  land  is  to  be  had  for  going  to  it.  On 
the  stage  of  agriculture  which  is  there  existing 
very  little  capital  and  very  little  division  of  labor 
are  necessary.  Hence  he  who  has  only  unskilled 
manual  strength  can  get  at  and  use  the  land,  and 
he  can  get  out  of  it  an  abundant  supply  of  the 


THE  LABORER'S  CHANCES.  99 

rude  primary  comforts  of  existence  for  himself 
and  his  family.  If  it  is  made  so  cheap  and  easy 
to  get  from  the  old  centers  of  population  to  the 
new  land  that  the  lowest  class  of  laborers  can  save 
enough  to  pay  the  passage,  then  the  effect  will 
reach  the  labor  market  of  the  old  countries  also. 
Such  is  now  the  tact. 

93.  The  weakness  of  a  true  wages  class  is  in  the 
fact  that  they  have  no  other  chance.     Obviously, 
however,  a  man  is  well  off  in  this  world  in  propor- 
tion to  the  chances  which  he  can  command.     The  ad- 
vantage of  education  is  that  it  multiplies  a  man's 
chances.     Our  non-capitalists  have  another  chance 
on  the  land,  and  the  chance  is  near  and  easy  to 
grasp  and  use.     It  is  not  necessary  that  all  or  any 
number  should    use  it.     Every  one  who  uses   it 
leaves  more  room  behind,  lessens  the  supply  and 
competition  of  laibor,  and  helps  his  class  as  a  class. 
The  other  chance  which  the  laborer  possesses  is 
also  a  good  one,  and  consequently  sets  the  mini- 
mum of  unskilled  wages  high.     Here  we  have  the 
reason  for  high  wages  in  a  new  country. 

94.  The  relation  of  things  was  distinctly  visible 
in  the  early  colonial  days.     Winthrop  tells  how 
the  General  Court  in  Massachusetts  Bay  tried  to 


.UNIVERSITY 


100  PROTECTIONISM. 

fix  the  wages  of  artisans  by  law.  It  is  obvious 
that  artisans  were  in  great  demand  to  build 
houses,  and  that  they  would  not  work  at  their 
trades  unless  the  wages  would  buy  as  good  or  bet- 
ter living  than  the  farmers  could  get  out  of  the 
ground,  for  these  artisans  could  go  and  take  up 
land  and  be  farmers  too.  The  only  effect  of  the 
law  was  that  the  artisans  "  went  West "  to  the 
valley  of  the  Connecticut,  and  the  law  became  a 
dead  letter.  The  same  equilibration  between  the 
gains  from  the  new  land  and  the  wages  of 
artisans  and  laborers  has  been  kept  up  ever 
since. 

95.  In  1884  an  attempt  was  made  to  unite  the 
Eastern  and  Western  Iron  Associations  for  com 
mon  effort  in  behalf  of  higher  wages.  The  union 
could  not  be  formed  because  the  Eastern  and 
Western  Associations  never  had  had  the  same  rate 
of  wages.  The  latter  being  further  west,  where 
the  supply  of  labor  is  smaller,  and  the  land 
nearer,  have  obtained  higher  wages.  It  may  be 
well  to  anticipate  a  little  right  here  in  order  to 
point  out  that  this  difference  in  wages  has  not  pre- 
vented the  growth  of  the  industry  in  the  West, 
and  has  not  made  competition  in  a  common 


WAGES  DO  NOT  CONTROL.  IOI 

market  impossible.*  The  fact  is  of  the  first 
importance  to  controvert  the  current  assumption 
of  the  protectionists.  They  say  that  an  industry 
can  not  be  carried  on  in  one  place  if  the  wages 
there  are  higher  than  must  be  paid  by  somebody 
in  the  same  industry  in  another  place.  Thisprop^- 
osition  has  no  foundation  in  fact;  at  all,  ,  Farm, 
laborers  in  Iowa  get  three  times 'tlie; -wages  of 
farm  laborers  in  England.  The  produces  MJ*tfe 
former  pay  5,000  miles  transportation,  and  then 
drive  out  the  products  of  the  latter.  Wages  are 
only  one  element,  and  often  they  are  far  from 
being  the  most  important  element  in  the  economy 
of  production.  The  wages  which  are  paid  to  the  j 
men  who  make  an  article  have  nothing  to  do  ^vith 
the  prile  or  value  of  that  article.  This  proposi- 
tion, I  know,  has  a  startling  effect  on  the  people 
who  hold  to  the  monkish  notions  of  political 
economy,  but  it  is  only  a  special  case  of  the  theo- 
rem that  "  Labor  vukick  is  past  has  no  effect  on 
vldue"  which  is  the  true  corner-stone  of  any  sound 
political  economy.  (  Wages  are  determined  by  the 
supply  and  demand  of  labor.  !  Value  is  determined  * 

*  This  is  the  case   for  which   the  Inter-Ocean   proposed   the 
remedy  described  §  71  note. 


102  PROTECTIONISM. 

by  the  supply  and  demand  of  the  commodity. 
These  two  things  have  no  connection.  Wages 
are  one  element  in  the  capitalist's  outlay  for  pro- 
duction. If  the  total  outlay  in  one  line  of  produc- 
tion, when  compared  with  the  return  obtained  in 
that  line,  is  not  as  advantageous  as  the  total  outlay 
in  another  line  when  compared  with  the  return 
.  available,  in  the  second  line,  then  the  capital  is 
•  v'Vfithd.raWn  frem  the  first  line  and  put  into  the 
'second,  but  the  rate  of  wages  in  either  case  or  any 
case  is  the  market  rate,  determined  by  the  supply 
and  demand  of  labor,  for  that  is  what  the  employ- 
ers must  pay  if  they  want  the  men,  whether  they 
are  making  any  profits  or  not. 

96.  The  facts  and  economic  principles  just 
stated  above  show  plainly  why  wages  are  high, 
and  put  in  strong  light  the  assertion  of  the  pro- 
tectionists that  their  device  makes  wages  high 
(§47),  that  is,  higher  than  they  would  be  other- 
wise, or  higher  here  than  they  are  in  Europe. 
Wages  are  not  arbitrary.  They  can  not  be  shifted 
up  and  down  at  any  body's  whim.  They  are  con. 
trolled  by  ultimate  causes.  If  not,  then  what  has 
made  them  fall  during  the  last  eighteen  months, 
ten  to  forty  per  cent.,  most  in  the  most  protected 


THE  WAGES-RAISER  DOES  NOT  WORK.      103 

industries  (§  26)  ?  Why  are  they  highest  in  the 
least  protected  and  unprotected  industries,  e.  g., 
the  building  trades?  Hod  carriers  recently 
struck  in  New  York  for  $3  for  nine  hours'  work. 
Where  did  the  tariff  touch  their  case  ?  Why  does 
not  the  tariff  prevent  the  fall  in  wages  ?  It  is  all 
there,  and  now  is  the  time  for  it  to  come  into 
operation,  if  it  can  keep  wages  up.  Now  it  is 
needed.  When  wages  were  high  in  the  market, 
and  it  was  not  needed,  it  claimed  the  credit. 
Now  when  they  fall  and  it  is  needed,  it  is  power- 
less. 

97.  Wages  are  capital.  If  I  promise  to  pay 
wages  I  must  find  capital  somewhere  with  which  to 
fulfill  my  contract.  If  the  tariff  makes  me  pay 
more  than  I  otherwise  would,  where  does  the  sur- 
plus come  from  ?  Disregarding  money  as  only 
an  intermediate  term,  a  man's  wages  are  his 
means  of  subsistence — food,  clothing,  house  rent, 
fuel,  lights,  furniture,  etc.  If  the  tariff  system 
makes  him  get  more  of  these  for  ten  hours'  work  in 
a  shop  than  he  would  get  without  tariff,  where  does 
the  "  more"  come  from?  Nothing  but  labor  and 
capital  can  produce  food,  clothing,  etc.  Either 
the  tax  must  make  these  out  of  nothing,  or  it  can 


104  PROTECTIONISM. 

only  get  them  by  taking  them  from  those  who 
have  made  them,  that  is  by  subtracting  them 
from  the  wages  of  somebody  else.  Taking  all 
the  wages  class  into  account  then  the  tax  can  not 
possibly  increase,  but  is  sure  by  waste  and  loss  to 
decrease  wages. 

U.)  How  Taxes  do  act  on  Wages. 
\  /Q8.  If  taxes  are  to  raise  wages  they  must  be 
{/laid  not  on  goods  but  on  men.  Let  the  goods  be 
abundant  and  the  men  scarce.  Then  the  average 
wages  will  be  high,  for  the  supply  of  labor  will  be 
small  and  the  demand  great.  If  we  tax  goods 
and  not  men,  the  supply  of  labor  will  be  great, 
the  demand  will  be  limited,  and  the  wages  will 
be  low.  Here  we  see  why  employers  of  labor 
want  a,  tariff.  For  it  is  an  obvious  inconsistency 
and  a  most  grotesque  satire  that  the  same  men 
should  tell  the  workmen  at  home  that  the  tariff 
makes  wages  high,  and  should  go  to  Washington 
and  tell  Congress  that  they  want  a  tariff  because 
the  wages  are  too  high.  We  have  found  that  the 
high  wages  of  American  laborers  have  indepen- 
dent causes  and  guarantees,  outside  of  legislation. 
They  are  provided  and  maintained  by  the  eco- 
nomic circumstances  of  the  country.  This  is 


WHA  T  PA  UPER  LABOR  IS.  105 

against  the  interest  of  those  who  want  to  hire  the 
laborers.  No  device  can  serve  their  interest 
unless  it  lowers  wages.  From  the  standpoint  of 
an  employer  the  fortunate  circumstances  of  the 
laborer  become  an  obstacle  to  be  overcome  (§  65). 
The  laborer  is  too  well  off.  Nothing  can  do  any 
good  which  does  not  make  him  less  well  off. 
The  competition  which  troubles  the  employer  is 
not  the  "  pauper  labor"  of  Europe. 

99.  "  Pauper  labor  "  had  a  meaning  in  the  first 
half  of  this  century,  in  England,  when  the  over- 
seers of  the  poor  turned  over  the  younger  portion 
of   the    occupants    of    the    poor-houses    to    the 
owners    of     the     new     cotton     factories,    under 
contracts   to   teach    them     the    trade    and    pay 
them     a     pittance.       Of     course     the     arrange- 
ment had  shocking  evils  connected  with  it,  but  it 
was    a    transition    arrangement.     The    "pauper 
laborers' "   children,    after   a   generation,  became 
independent    laborers ;    the    system    expired    of 
itself,  and  "  pauper  laborer  "  is  now  a  senseless 
jingle. 

100.  The  competition  which  the  employers  fear 
is  the  competition  of  those  industries  in   America 
which  can  pay  the  high  wages  and  which  keep  the 


V 

to6  PROTECTIONISM. 

wages  high  because  they  do  pay  them.  These  draw 
the  laborer  away.  These  offer  him  another 
chance.  If  he  had  no  other  way  of  earning  more 
than  he  is  earning,  it  would  be  idle  for  him  to 
demand  more.  The  reason  why  he  demands 
more  and  gets  it  is  because  he  knows  where  he 
can  get  it,  if  he  can  not  get  it  where  he  is.  If 
then  he  is  to  be  brought  down,  the  only  way  to 
do  it  is  to  destroy,  or  lessen  the  value  of,  his  other 
chance.  This  is  just  what  the  tariff  does. 

101.  The  taxes  which  are  laid  for  protection 
must  come  out  of  somebody.  As  I  have  shown 
(§  32>  fg-)  *ne  protected  interests  give  and  take 
from  each  other,  but,  if  they  as  a  group  win  any 
thing,  they  must  win  from  another  group,  and 
that  other  group  must  be  the  industries  which 
are  not  and  can  not  be  protected.  In  England 
these  were  formerly  manufactures  and  they  were 
taxed,  under  the  corn  laws,  for  the  benefit  of 
agriculture.  In  the  United  States,  of  course,  the 
case  must  be  complementary  and  opposite.  We 
tax  agriculture  and  commerce  to  benefit  manufac- 
tures. Commerce,  /.  e.  the  ship  building  and 
carrying  trade,  has  been  crushed  out  of  existence 
by  the  burden  (§  86).  But  the  burden  thus  ] 


THE  BLESSING  OF  LESS  COMFORT.  107 

thrown  on  agriculture  and  commerce  lowers  the 
gains  of  those  industries,  lessens  the  attractive- 
ness of  them  to  the  laborer,  lessens  the  value  of 
the  laborer's  other  chance,  lessens  the  competition 
of  other  American  industries  with  manufacturing, 
and  so,  by  taking  away  from  the  blessing  which 
God  and  nature  have  given  to  the  American 
laborer,  enable  the  man  who  wants  to  hire  his  ser- 
vices to  get  them  at  a  lower  rate.  The  effect  of 
the  taxes  is  just  the  same  as  such  a  percentage 
taken  from  the  fertility  of  the  soil,  the  excellence 
of  the  climate,  the  power  of  tools,  or  the  indus- 
trious habits  of  the  people.  Hence  it  reduces  the 
average  comfort  and  welfare  of  the  population,  and 
'  with  that  average  comfort  it  carries  down  the 
wages  of  such  persons  as  work  for  wages. 

C.)  Perils  of  Statistics,  Especially  of  Wages. 

102.  Any  student  of  statistics  will  be  sure  to 
have  far  less  trust  in  statistics  than  the  uninitiated 
entertain.  The  book-keepers  have  taught  us  that 
figures  will  not  lie,  but  that  they  will  tell  very 
queer  stones.  Statistics  will  not  lie,  but  they  will 
play  wonderful  tricks  with  a  man  who  does  not 
understand  their  dialect.  The  unsophisticated 


Io8  PROTECTIONISM. 

reader  finds  it  difficult,  when  a  column  of  statistics 
is  offered  to  him,  to  resist  the  impression  that  they 
must  prove  something.  The  fact  is  that  a  column 
of  statistics  hardly  ever  proves  any  thing.  It  is  a 
popular  opinion  that  any  body  can  use  or  under- 
stand statistics.  The  fact  is  that  a  special  and 
high  grade  of  skill  is  required  to  appreciate  the 
effect  of  the  collateral  circumstances  under  which 
the  statistics  were  obtained,  to  appreciate  the 
limits  of  their  application,  and  to  interpret  their 
significance.  The  statistics  which  are  used  to 
prove  national  prosperity  are  an  illustration 
of  this,  for  they  are  used  as  absolute  meas- 
ures when  it  is  plain  that  they  have  no  use  except 
for  a  comparison.  Sometimes  the  other  term  of 
the  comparison  is  not  to  be  found  and  it  is  always 
ignored  (§  52). 

103.  A  congressional  committee  in  the  winter 
of  1883-4,  dealing  with  the  tariff,  took  up  the 
'census  and  proceeded  to  reckon  up  the  wages  in 
steel  production  by  adding  all  the  wages  from  the 
iron  mine  up.  Then  they  took  bar  iron  and 
added  all  the  wages  from  the  bottom  up  again,  in 
order  to  find  the  importance  of  the  wages  element 
in  that,  and  so  on  with  every  stage  of  iron  indus- 


FALLA  C1ES  IN  STA  TISTICS.  109 

try.     They  were  going  to  add  in  the  same  wages 
six  or  eight  times  over. 

104.  The  statistics  of  comparative  wages  which 
are  published  are  of  no  value  at  all.*  It  is  net 
known  how,  or  by  whom,  or  from  what 
selected  cases,  they  were  collected.  It  is  not 
known  how  wide,  or  how  long,  or  how  thorough, 
was  the  record  from  which  they  were  taken.  The 
facts  about  various  classifications  of  labor  in  the 
division  of  labor,  and  about  the  rate  •  at  which 
machinery  is  run,  or  about  the  allowances  of  one 
kind  and  another  which  vary  from  mill  to  mill 
and  town  to  town  are  rarely  specified  at  all. 
Protected  employers  are  eager  to  tell  the  wages 
they  pay  per  day  or  week,  which  are  of  no  import- 
ance. The  only  statistics  which  would  be  of  any 
use  for  the  comparison  which  is  attempted  would 
be  such  as  show  the  proportion  of  wages  to  total 
cost  per  unit.  Even  this  comparison  would  not 
have  the  force  which  is  attributed  to  the  other. 
Hence  the  statistics  offered  are  worthless  or  posi- 
tively misleading.  In  the  nature  of  the  case  such 
statistics  are  extremely  hard  to  get.  If  applica- 

*  I  except  those  of  Mr.  Carroll  Wright.  He  has  sufficiently 
stated  of  how  slight  value  his  are. 


1 1 0  PRO  TECTIONISM. 

tion  is  made  to  the  employers,  the  inquiry  con- 
cerns their  private  business.  They  have  no  inter- 
est in  answering.  They  can  not  answer  without 
either  spending  great  labor  on  their  books  (if  the 
inquiry  covers  a  period),  or  surrendering  their 
books  to  some  one  else,  if  they  allow  him  to  do 
the  labor.  If  inquiry  is  made  of  the  men,  it 
becomes  long  and  tedious  and  full  of  uncertainties. 
Do  United  States  Consuls  take  the  trouble 
involved  in  such  an  inquiry?  Have  they  the 
training  necessary  to  conduct  it  successfully? 

105.  The  fact  is  generally  established  and  is  not 
disputed  that  wages  are  higher  here  than  in 
Europe.  The  difference  is  greatest  on  the  lowest 
grade  of  labor — manual  labor,  unskilled  labor. 
The  difference  is  less  on  higher  grades  of  labor. 
For  what  the  English  call  "  engineers,"  men  who 
possess  personal  dexterity  and  creative  power,  the 
difference  is  the  other  way,  if  we  compare  the 
United  States  and  England.  The  returns  of 
immigration  reflect  these  differences  exactly 
(§  122,  note).  The  great  body  of  the  immigrants 
consists  of  farmers  and  laborers.  The  "  skilled 
laborers  "  are  comparatively  a  small  class,  and,  if 
the  claims  of  the  individuals  to  be  what  they  call 


DEFINITION-  OF  SOCIALISM.  1 1 1 

themselves  were  tested  by  English  or  German 
trade  standards,  the  number  would  be  very  small 
indeed.  Engineers  emigrate  from  Germany  lo 
England.  Men  of  that  class  rarely  come  to  this 
country,  or,  if  they  come,  they  come  under 
special  contracts,  or  soon  return.  Each  country, 
spite  of  all  taxes  and  other  devices,  gets  the  class 
of  men  for  which  its  industrial  condition  offers 
the  best  chances.  The  only  thing  the  tariff  does 
in  the  matter  is  to  take  from  those  who  have  an 
advantage  here  a  part  of  that  advantage. 

4 .  PRO  TECTIONISM  IS  SO  CIA  L  ISM. 

106.  To  simply  give  protectionism  a  bad  name 
would  be  to  accomplish  very  little.  When  I  say 
that  protectionism  is  socialism  I  mean  to  classify 
it  and  bring  it  not  only  under  the  proper  heading 
but  into  relation  with  its  true  affinities.  (  Social- 
ism is  any  device  or  doctrine  whose  aim  is  to  save 
individuals  from  any  of  the  difficulties  or  hardships 
of  the  struggle  for  existence  and  the  competition  of 
life  by  the  intervention  of  "the  State"  Inasmuch 
as  "  the  State  "  never  is  or  can  be  any  thing  but 
some  other  people,  socialism  is  a  device  for  mak- 
ing some  people  fight  the  struggle  for  existence 
for  others.  The  devices  always  have  a  doctrine 


112  PROTECTIONISM. 

behind  them  which  aims  to  show  why  this  ought 
to  be  done. 

107.  The  protected  interests  demand  that  they  be 
saved  from  the  trouble  and  annoyance  of  business 
competition,  and  that  they  be  assured  profits  in 
their  undertakings,  by  "  the  State,"  that  is,  at  the 
expense  of  their  fellow-citizens.  If  this  is  not  so- 
cialism, then  there  is  no  such  thing.  If  employ- 
ers may  demand  that  "  the  State  "  shall  guarantee 
them  profits,  why  may  not  the  employe's  demand 
that  "  the  State  "  shall  guarantee  them  wages  ? 
If  we  are  taxed  to  provide  profits,  why  should  we 
not  be  taxed  for  public  workshops,  for  insurance 
to  laborers,  or  for  any  other  devices  which  will 
give  wages  and  save  the  laborer  from  the  annoy- 
ances of  life  and  the  risks  and  hardships  of  the 
struggle  for  existence?  The  "  we  "who  are  to 
pay  changes  all  the  time,  and  the  turn  of  the  pro- 
tected employer  to  pay  will  surely  come  before 
long.  The  plan  of  all  living  on  each  other  is 
capable  of  great  expansion.  It  is,  as  yet,  far 
from  being  perfected  or  carried  out  completely. 
The  protectionists  are  only  educating  those  who 
are  as  yet  on  the  "  paying  "  side  of  it,  but  who 
will  certainly  use  political  power  to  put  them- 


EXPANSION  OF  THE  DOGMA.  113 

selves  also  on  the  "  receiving  "  side  of  it.  The 
argument  that  "  the  State  "  must  do  something 
for  me  because  my  business  does  not  pay,  is  a 
very  far-reaching  argument.  If  it  is  good  for  pig 
iron  and  woollens,  it  is  good  for  all  the  things  to 
which  the  socialists  apply  it. 


CHAPTER  IV. 
SUNDRY  FALLACIES  OF   PROTECTIONISM. 

108.  I  can   now  dispose   rapidly  of  a  series  of 
current   fallacies  put   forward  by  the  protection- 
ists.    They  generally  are   fanciful  or  far-fetched 
attempts  to  show  some  equivalent  which  the  tax- 
payer gets  for  his  taxes. 

(A).   That  infant  industries  can  be  nourished  up  to 
independence  and  that  they  then  become  productive. 

109.  I  know   of  no  case  where  this  hope  has 
been  realized,  although  we  have  been  trying  the 
experiment  for  nearly  a  century.    The  weakest  in- 
fants to-day  are  those  whom  Alexander  Hamilton 
set  out  to  protect  in  1791.     As  soon  as  the  infants 
begin  to  get  any  strength  (if  they  ever  do  get  any) 
the  protective  system   forces  them   to  bear  the 
burden  of  other  infants,  and  so  on  forever.     The 
system   superinduces    hydrocephalus   on   the  in- 
fants, and  instead  of  ever  growing  to  maturity, 


INFANT  INDUSTRIES.  1 1 5 

the  longer  they  live,  the  bigger  babies  they  are. 
It  is  the  system  which  makes  them  so,  and  on  its 
own  plan  it  can  never  rationally  be  expected  to 
have  any  other  effect.  (See  further,  under  the 
next  fallacy,  §  1 1 1,  fg.) 

no.  Mill  *  makes  a  statement  of  a  case,  as 
within  the  bonds  of  conceivability,  where  there 
might  be  an  advantage  for  a  young  country  to 
protect  an  infant  industry.  He  is  often  quoted 
without  regard  to  the  limitation  of  his  statement, 
as  if  he  had  affirmed  the  general  expediency  of  pro- 
tection in  new  countries  and  for  infant  industries. 
It  amounts  to  a  misquotation  to  quote  him  with- 
out regard  to  the  limitations  which  he  specified. 
The  statement  which  he  did  make  is  mathemati- 
cally demonstrable.!  The  doctrine  so  developed  is 
very  familiar  in  private  enterprise.  A  business 
enterprise  may  be  started  which  for  some  years 

*  Bk.  V.,  ch.  10,  §  I. 

f  It  has  been  developed  mathematically  by  a  French  mathema- 
tician (/ournaldes  Ecojiemistes,  Aug.  and  Sept.,  1873,  pp.  285  and 
464).  Let  a  be  the  mean  annual  loss  by  the  tax  so  long  as  it  lasts 
in  order  to  start  the  industry.  Let  b  be  the  mean  annual  gain  by 
the  industry  after  it  is  started.  Let  x  be  the  years  that  the  tax  is 
to  last.  The  losses  and  gains  must  be  capitalized  at  their  present 
worth.  The  present  worth  of  the  losses  is  the  sum  of  the  series, 

a  a  a 

'    (i+r)  '  ' 


1 1 6  PRO  TECTIONISM. 

will  return  no  profits  or  will  occasion  losses,  but 
which  is  expected  later  to  recoup  all  these.  What 
are  the  limits  within  which  such  an  enterprise  can 
succeed?  It  must  either  call  for  sinking  capital 
only  for  a  short  period  (like  building  a  railroad  or 
planting  an  orange  grove),  or  it  must  promise 
enormous  gains  after  it  is  started  (like  a  patented 
novelty).  The  higher  the  rate  of  interest,  as  in 
any  new  country,  the  more  stringent  and  narrow 
these  conditions  are.  Mill  said  that  it  was  con- 
ceivable that  a  case  of  an  industry  might  occur  in 
which  this  same  calculation  might  be  applied  to  a 
protective  tax.  If,  then,  any  body  says  that  he 


The  present  worth   of  the  gains  forever  is    the  sum  of   the  in- 
finite series, 


Putting  one  of  these  sums  equal  to  the  other  we  get 


log:(x+r) 
In  this  expression  let  r  be  six  per  cent.,  give  various  values  to  x, 

b 
and  derive  the  ratio  —  .     It  then  appears  that,  if  the  tax  lasts  Jive 

a 

years,  the  mean  annual  gains  forever  must  be  one-third  of  the 
mean  annual  losses  in  order  that  there  may  be  neither  gain  nor 
loss  from  the  experiment.  If  the  tax  lasts  ten  years  the  gains  for- 
ever must  be  80  per  cent  of  the  losses  for  that  period  ;  25  years, 
£29  per  cent  ;  100  years,  33,900  per  cent. 


MILL'S  CA  SE  INADMISSIBLE.  1 1 7 

can  offer  an  industry  which  meets  the  conditions, 
let  it  be  examined  to  see  if  it  does  so.  If  protec- 
tion is  never  applied  until  such  a  case  is  offered, 
it  will  never  be  applied  at  all.  A  thing  which  is 
mathematically  conceivable  is  one  which  is  not 
absurd  ;  but  a  thing  which  is  practically  possible 
is  quite  another  thing.  For  myself,  I  strenuously 
dissent  from  Mill's  doctrine  even  as  he  limits  it. 
In  the  first  place  the  state  can  not  by  taxes  work 
out  an  industrial  enterprise  of  a  character  such 
that  it,  as  any  one  can  see,  demands  the  most  in-i 
tense  and  careful  oversight  by  persons  whose  capital 
is  at  stake  in  it,  and,  in  the  second  place,  the 
state  would  bear  the  loss,  while  it  lasted,  but  pri- 
vate interests  would  take  the  gain  after  it  began. 

(7?.)  That  protective  taxes  do  not  raise  prices  but 
lower  prices. 

in.  To  this  it  is  obvious  to  reply:  what 
good  can  they  then  do  toward  the  end  pro- 
posed? Still  it  is  true  that,  under  circumstances, 
protective  taxes  do  lower  prices.  The  protection- 
ist takes  an  infant  industry  in  hand  and  proposes 
to  rear  it  by  putting  on  taxes  to  ward  off  compe- 
tition, and  by  giving  it  more  profits  than  the 


1 1 8  PRO  TECTIONISM. 

world's  market  price  would  give.  This  raises  the 
price.  But  the  consumer  then  raises  a  complaint. 
The  protectionist  turns  to  him  and  promises  that 
by  and  by  there  will  be  "  overproduction,'*  and 
prices  will  fall.  This  arrives  in  due  time,  for  every 
protected  industry  is  organized  as  a  more  or  less 
limited  monopoly,  and  a  monopoly  which  has 
overproduced  its  market,  at  the  price  which  it 
wants,  is  the  weakest  industry  possible  (§  24). 
The  consumer  now  wins,  but  a  wail  from  the  cradle 
calls  the  protectionist  back  to  the  infant  industry 
which  is  in  convulsions  from  "  overproduction." 
Some  of  the  infants  die.  This  gives  a  new  chance 
to  the  others.  They  combine  for  more  effective 
monopoly,  put  the  prices  up  again  by  limiting 
production,  and  go  on  until  "  overproduction  " 
produces  a  new  collapse.  This  is  another  reason 
why  infants  never  win  vitality.  The  net  result  is 
that  the  market  is  in  constant  alternations  of 
stringency  and  laxity,  and  nothing  at  all  is  gained. 
112.  Whenever  we  talk  of  prices  it  should  be  no-, 
ticcd  that  our  statements  involve  money — the 
rate  at  which  goods  exchange  for  money.  If  then 
\  we  want  to  raise  prices,  we  must  restrict  the  sup- 
V  ply  of  goods,  so  that  on  the  doctrine  of  money 


MAN  A  GEM  EN  T  OF  MONOPOL  Y.  119 

also  we  shall  come  to  the  same  result  as  before,  I  y 
that  protective  taxes  lessen  production  and  dimin- 
ish wealth. 

113.  The  problem  of  managing  any  monopoly  is 
to  dose  the  market  with  just  the  quantity  which  it 
will  take  at  the  price  which  the  monopolist  wants 
to  get.    In  a  qualified  monopoly,  that  is,  one  which 
is  shared  by  a  number  of  persons,  the  difficulty  is 
to  get  agreement  about  the  management.     They 
may  not  have  any  communication  with  each  other 
and  may  compete.     If  so  they  will  overdose  the 
market  and  the  price  will  fall.     Then  they   meet, 
to    establish  communication  ;    form  an  "  associa- 
tion," to  get  harmonious  action,  and  agree   to  di- 
vide the  production  among  them    and   limit    and 
regulate  it,    to   prevent   the  former  mistake    anJ 
restore  prices  (§  24). 

(C.)   That  we  should  be   a  purely  agricultural 
nation  under  free  trade. 

114.  A    purely    agricultural     nation    covering 
a  territory  as  large  as  that  of  the  United  StaUs 
is     inconceivable.     The     distribution    of    indus- 
tries now  inside  the  United  States  is  a  complete 
proof  that  no  such  thing  would    come  to  pass, 


120  PROTECTIONISM. 

for  we  have  absolute  free  trade  inside,  and 
manufactures  are  growing  up  in  the  agricultural 
states  just  as  fast  as  circumstances  favor,  and 
just  as  fast  as  they  can  be  profitably  carried 
on.  Under  free  trade  there  would  be  a  subdivis- 
ion of  cotton,  woollen,  iron  and  other  industries, 
and  we  should  both  export  and  import  different 
varieties  and  qualities  of  these  goods.  The  south- 
ern states  are  now  manufacturing  coarse  cottons 
in  competition  with  New  England.  The  western 
states  manufacture  coarse  woollens,  certain  grades 
of  leather  and  iron  goods,  etc.,  in  competition  with 
the  East.  Here  we  see  the  exact  kind  of  differen- 
tiation which  would  take  place  under  free  trade, 
and  we  can  see  the  mischief  of  the  tariff,  whether 
on  the  one  hand  it  strikes  a  whole  category  with 
the  same  brutal  ignorance,  or  tries,  by  cunning 
sub-classification,  to  head  off  every  effort  to  save 
itself  which  the  trade  makes.*  If,  however,  it  was 
conceivable  that  we  should  become  a  purely  agri- 
cultural nation,  the  only  legitimate  inference  would 
be  that  our  whole  population  could  be  better  sup- 
ported in  that  way  than  in  any  other.  If  there 

*  See  a  fallacy  under  this  head  :      Cunningham,    Growth   of 
English  Industry,  410,  note. 


PROFESSION  VERSUS  PER  FOR  MA  NCR.         121 

was  a  greater  profit   in   something   else   some   of 
them  would  go  into  it. 

(D.)  That  communities  which  manufacture  are 
more  prosperous  than  those  which  are  agricultural. 

115.  This  is  as  true  as  if  it  should  be  said  that 
all  tall  men  are  healthy.  It  would  be  answered 
that  some  are  and  some  are  not ;  that  tallness  and 
health  have  no  connection.  Some  manufacturing 
communities  are  prosperous  and  some  not.  The 
self-contradiction  of  protectionism  appears  in  one 
of  its  boldest  forms  in  this  fallacy.  We  are  told 
that  manufactures  are  a  special  blessing.  The 
protectionist  says  that  he  is  going  to  give  us  some. 
Instead  of  that  he  makes  new  demands  on  us,  lays 
a  new  burden  on  us,  gives  us  nothing  but  more 
taxes.  He  promises  us  an  income  and  increases 
our  expenditure  ;  promises  an  asset  and  gives  a 
liability ;  promises  a  gift  and  creates  a  debt ; 
promises  a  blessing  and  gives  a  burden.  The  very 
thing  which  he  boasts  of  as  a  great  and  beneficial 
advantage  gives  us  nothing,  but  takes  from  us 
more.  Prosperity  is  no  more  connected  with  one 
form  of  industry  than  another.  If  it  were  so, 
some  of  mankind  would  have,  by  nature,  a  per- 


122  PROTECTIONISM. 

manently  better  chance  than  others,  and  no  one 
could  emigrate  to  a  new,  that  is  agricultural  coun- 
try, without  injuring  his  interests.  The  world  is 
not  made  so. 

(£.)  That  it  is  an  object  to  diversify  industry*, 
and  that  nations  which  have  various  industries  are 
stronger  than  others  which  have  not  various  indus- 
tries. 

116.  It  is  not  an  object  to  diversify  industry, 
but  to  multiply  and  diversify  our  satisfactions, 
comforts,  and  enjoyments.  If  we  can  do  this  by 
unifying  our  industry,  in  greater  measure  than  by 
diversifying  it,  then  we  should  do,  and  we  will  do, 
the  former.  It  is  not  a  question  to  be  decided  a 
priori,  but  depends  upon  economic  circumstances. 
If  a  country  has  a  supremacy  in  some  one  indus- 
try it  will  have  only  one.  California  and  Austra- 
lia had  only  one  industry  until  the  gold  mines  de- 
clined in  productiveness,  that  is,  until  their 
supreme  advantage  over  other  countries  was  dim- 
inished :  they  began  to  diversify  when  they 
began  to  be  less  well  off.  The  oil  region  of  Penn- 
sylvania has  a  chance  of  three  industries,  the  old 
farming  industry,  coal,  and  oil.  It  will  have  only 


WHICH  NA  TION  IS  STRONGEST.  1 23 

one  industry  so  long  as  oil  gives  chances  superior 
to  those  enjoyed  by  any  other  similar  district. 
When  it  loses  its  unique  advantage  by  nature  it 
will  diversify.  The  "  strongest  "  nation  is  the  one 
which  k  brings  products  into  the  world's  market 
which  are  of  high  demand,  but  which  cost  it  little 
toil  and  sacrifice  to  get ;  for  it  will  then  have 
command  of  all  the  good  things  which  men  can 
get  on  earth  at  little  effort  to  itself.  Whether  the 
products  which  it  offers  are  one  or  numerous  is 
immaterial.  All  the  tariff  has  to  do  with  it  is  that 
when  the  American  comes  into  the  world's  market 
with  wheat,  cotton,  tobacco,  and  petroleum,  all 
objects  of  high  demand  by  mankind  and  little  cost 
to  him,  it  forces  him  to  forego  a  part  of  his  due  ad- 
vantage. (§§  125,  134.) 

(F.)   That  manufactures  give  value  to  land. 

117.  This  doctrine  issued  from  the  Agricultural 
Bureau.  It  has  been  thought  a  grand  develop- 
ment of  the  protectionist  argument.  It  is  a  simple 
logical  fallacy  based  on  some  misconstrued  sta- 
tistics. The  value  of  land  depends  on  supply 
and  demand.  The  demand  for  land  is  population. 
Hence  where  the  population  is  dense  the  value 


124  PROTECTIONISM. 

of  land  is  great.  Manufactures  can  be  carried 
on  only  where  there  is  a  supply  of  labor,  that  is, 
where  the  population  is  dense.  Hence  high  value 
of  land  and  manufacturing  industry  are  common 
results  of  dense  population.  The  statistician  of 
the  Agricultural  Bureau  connected  them  with 
each  other  as  cause  and  effect,  and  the  New  York 
Tribune  said  that  it:  was  the  grandest  contribu- 
tion to  political  economy  since  "  the  fingers  of 
Horace  Greeley  stiffened  in  death ;  "  which  was 
true. 

118.  If  manufactures  spring  up  spontaneously 
out  of  original  strength,  and  by  independent 
development,  of  course  they  "  add  value  to  land/* 
that  is  to  say,  the  district  has  new  industrial 
power  and  every  interest  in  it  is  benefited ;  but, 
if  the  manufactures  have  to  be  protected,  paid  for, 
and  supported,  they  do  not  do  any  good  as  manu- 
factures, but  only  as  a  device  for  drawing  capital 
from  elsewhere,  as  tribute.  In  this  way,  pro- 
tective  taxes  do  alter  the  comparative  value  of 
land  in  different  districts.  This  effect  can  be  seen 
tinder  some  astonishing  phases  in  Connecticut  and 
other  manufacturing  states.  The  farmers  are 
tax?rl  to  hire  some  people  to  go  and  live  in  manu. 


EFFECT  OF  D  ISP  LA  CING  POP  ULA  TSOM      i  2  g 

factoring  villages  and  carry  on  manufacturing 
there.  This  displacement  of  population,  brought 
about  at  the  expense  of  the  rural  population, 
diminishes  the  value  of  agricultural  land  and 
raises  that  of  city  land  right  here  within  the  same 
state.  The  hill  side  population  is  being  impover- 
ished, and  the  hill-side  farms  are  being  abandoned 
on  account  of  the  tribute  levied  on  them  to  swell 
the  value  of  mill  sites  and  adjoining  land  in  the 
manufacturing  towns.  (§§  120,  137.) 

(G.)  That  the  farmer,  if  he  pays  taxes  to 
bring  into  existence  a  factory,  which  would  not 
otherwise  exist,  will  win  more  than  the  taxes  .by 
selling  farm  produce  to  the  artisans. 

1 19.  This  is  an  arithmetical  fallacy.  It  proposes 
to  get  three  pints  out  of  a  quart.  The  farmer  is 
out  for  the  tax  and  the  farm  produce  and  he  can 
not  get  back  more  than  the  tax  because,  if  the  fac- 
tory owes  its  existence  to  the  protective  taxes,  it 
can  not  make  any  profit  outside  of  the  taxes. 
The  proposition  to  the  farmer  is  that  he  shall  pay 
taxes  to  another  man  who  will  bring  part  of  the 
tax  back  to  buy  produce  with  it.  This  is  to  make 
the  farmer  rich.  The  man  who  owned  stock 


1 26  PRO  TECTIONISM. 

I'm  a  railroad  and  who  rode  on  it,  paying  his  fare, 
'in  the  hope  of  swelling  his  own    dividends,  was 
wise  compared  with  a  farmer  who  believes  that 
j  protection  can  be  a  source  of  gain  to  him. 

120.  Since,  as  I  have  shown  (§  101),  protective 
taxes  act  like  a  reduction  in  the  fertility  of  the  soil, 
they  lower  the  "margin  of  cultivation,"  and  raise 
rent.  They  do  not,  however,  raise  it  in  favor  of  the 
agricultural  land  owner,  for,  by  the  displacement 
just  described,  they  take  away  from  him  to  give 
to  the  town  land  owner.  Of  course,  I  do  not 
believe  that  the  protective  taxes  have  really 
lowered  the  margin  of  cultivation  in  this  country, 
for  they  have  not  been  able  to  offset  the  greater 
richness  of  the  newest  land,  and  the  advance  in 
the  arts.  What  protection  costs  us  comes  out  of 
the  exuberant  bounty  of  nature  to  us.  Still  I 
know  of  very  few  who  could  not  stand  it  to  be  a 
great  deal  better  off  than  they  are,  and  the  New 
England  farmer  is  the  one  who  has  the  least 
chance,  and  the  fewest  advantages,  with  which  to 
endure  protection. 


GAIN  BY  S UPPOR TING  0 T PIERS.  127 

(//".)  That  farmers  gain  by  protection,  because 
it  draws  so  many  laborers  out  of  competition  with 
them. 

121.  Since  the  farmers  pay  the  taxes  by  which 
this  operation  is  supposed  to  be  produced,  a 
simple  question  is  raised,  viz.,  how  much  can  one 
afford  to  pay  to  buy  off  competition  in  his  busi- 
ness? He  can  not  afford  to  pay  any  thing  unless 
he  has  a  monopoly  which  he  wants  to  consolidate. 
Our  farmers  are  completely  open  to  competition 
on  every  side.  The  immigration  of  farmers  every 
three  or  four  years  exceeds  all  the  workers  in  all 
the  protected  trades.  Hence  the  farmers,  if  they 
take  the  view  which  is  recommended  to  them, 
instead  of  gaining  any  ground,  are  face  to  face 
with  a  task  which  gets  bigger  and  bigger  the 
longer  they  work  at  it.  If  one  man  should  sup- 
port another  in  order  to  get  rid  of  the  latter's 
competition  as  a  producer,  that  would  be  the  case 
where  the  tax  payer  supports  soldiers,  idle  pen- 
sioners, paupers,  etc.  A  protected  manufacturer, 
however,  by  the  hypothesis,  is  not  simply  sup- 
ported in  idleness,  but  he  is  carrying  on  a  busi- 
ness the  losses  of  which  must  be  paid  by  those 


1 23  PROTECTIONISM. 

who  buy  off  his  competition  in  their  own  produc- 
tion. On  the  other  hand,  when  farmers  come  to 
market,  they  are  in  free  competition  with  several 
other  sources  of  supply.  Hence,  if  they  did  any 
good  to  agricultural  industry  by  hiring  the  arti- 
sans to  go  out  of  competition  with  them,  they 
would  have  to  share  the  gain  with  all  their  com- 
petitors the  world  over  while  paying  all  the 
expense  of  it  themselves. 

122.  The  movement  of  men  over  the  earth  and 
the  movement  of  goods  over  the  earth  are  com- 
plementary operations.  Passports  to  stop  the 
men  and  taxes  to  stop  the  goods  would  be  equally 
legitimate.  Since  it  is,  once  for  all,  a  fact  that 
some  parts  of  the  earth  have  advantages  for  one 
thing  and  other  parts  for  other  things,  men  avail 
themselves  of  the  local  advantages  either  by 
moving  themselves  to  the  places,  or  by  trading 
what  they  produce  where  they  are  for  what  others 
produce  in  the  other  places.  The  passenger  trains 
and  the  freight  trains  are  set  in  motion  by  the 
same  ultimate  economic  fact.  Our  exports  are 
all  bulky  and  require  more  tonnage  than  our  im- 
ports. On  the  westward  trip,  consequently,  bunks 
are  erected  and  men  are  brought  in  space  where 


WHO  IMMIGRA  TE. 


129 


cotton,  wheat,  etc.,  were  taken  out.  The  tariff, 
by  so  much  as  it  lessens  the  import  of  goods, 
leaves  room  which  the  ship  owners  are  eager  to 
fill  with  immigrants.  To  do  this  they  lower  the 
rates.  Hence  the  tariff  is  a  premium  on  immigra-/ 
tion.  The  protectionists  have  claimed  that  the 
tariff  does  favor  immigration.  But  nine-tenths  of 
the  immigrants  are  laborers,  domestic  servants, 
and  farmers.*  Probably  more  than  one-third 
of  the  total  number,  including  women,  find 
their  way  to  the  land.  As  we  have  seen,  the,  / 
tariff  also  lowers  the  profits  of  agriculture,*' 
which  discourages  immigration  and  the  move- 
ment to  the  land.  Therefore,  if  the  farmer 
believes  what  the  protectionist  tells  him,  he 
must  understand  that  the  taxes  he  pays  bring 
in  more  people,  and  raise  the  value  of  land  by 
settling  it,  and  that  they  also  bring  more  compe- 

*  IMMIGRATION  IN  1884. 


Males. 

Females. 

Total 

Professional  occupations.  . 
Skilled  occupations.  ...... 

.     2,184 
.   50,905 

100 

4,156 

2,284 
55,061 

Occupations  not  stated.  .  .  . 
No  occupation  

.    19.778 

.   75,483 

11,887 
169,904 

31,665 

245,387 

Miscellaneous  occupations 

160,159 

24,036 

184,195 

Total.  . 

.3o8,=;oQ 

210,083 

5i8,5q2 

Under  miscellaneous  were  106,478  laborers  and  42,050  farmers. 


130  PROTECTIONISM. 

tition,  which  the  farmer  must  buy  off  by  lowering 
the  profits  of  his  own  (the  farming)  industry. 
Then,  too,  so  far  as  the  immigrants  are  artisans, 
the  premium  on  immigration  is  a  tax  paid  to 
.  /increase  the  supply  of  labor,  that  is,  to  lower 
wages,  although  the  protectionists  say  that  the 
tariff  raises  wages.  Hence  we  see  that  when  a 
tax  is  laid,  in  our  modern  complicated  society, 
instead  of  being  a  simple  and  easy  means  or 
method  to  be  employed  for  a  specific  purpose,  its 
action  and  reaction  on  transportation,  land,  wages, 
etc.,  will  produce  erratic,  contradictory,  and  con- 
fused effects,  which  can  not  be  predicted  or  an- 
alyzed thoroughly,  and  the  protectionist,  when  he 
pleads  three  or  four  arguments  for  his  system,  is 
alleging  three  or  four  features  of  it  which,  if 
properly  analyzed  and  brought  together,  are 
found  to  be  mutually  destructive,  and  cumulative 
only  as  to  the  mischief  they  do.  (See  §§  29,  101.) 

(/.)  That  our  industries  would  perish  without 
protection. 

123.  Those  who  say  this  think  only  of 
manufacturing  establishments  as  "  industries." 
They  also  talk  of  "  our  "  industries.  They  mean 


WHICH  INDUSTRIES  ARE  OURS.  131 

those  we  support  by  the  taxes  we  pay;  not 
those  from  which  we  get  dividends.  No  in- 
dustry will  ever  be  given  up  except  in  order 
to  take  up  a  better  one,  and  if,  under  free  ^ 
trade,  any  of  our  industries  should  perish,  it  would 
only  be  because  the  removal  of  restrictions 
enabled  some  other  industry  to  offer  so  much  bet- 
ter rewards  that  labor  and  capital  would  seek  the 
latter.  It  is  plain  that,  if  a  man  does  not  know  of 
any  better  way  to  earn  his  living  than  the  one  in 
which  he  is,  he  must  remain  in  that,  or  move  to 
some  other  place.  If  any  one  can  suppose  that 
the  population  of  the  United  States  could  be 
forced,  by  free  trade,  to  move  away,  he  must  sup- 
pose that  this  country  can  not  support  its  popula- 
tion, and  that  we  made  a  mistake  in  coming  here. 
This  argument  is  especially  full  of  force  if  the 
articles  to  be  produced  are  coal,  iron,  wool,  cop- 
per, timber,  or  any  other  primary  products  of  the 
soil.  For,  if  it  is  said  that  we  can  not  raise  these 
products  of  the  soil  in  competition  with  some 
other  part  of  the  earth's  surface,  all  it  proves  is 
that  we  have  come  to  the  wrong  spot  to  seek 
them.  If,  however,  the  soil  can  support  the 
population  under  an  arrangement  by  which  cer- 


132  PROTECTIONISM. 

tain  industries  support  themselves,  and  those 
which  do  not  pay  besides,  then  it  is  plain  that  the 
former  are  really  supporting  the  whole  popula- 
tion,— part  directly  and  part  indirectly,  through  a 
circuitous  and  wasteful  organization.  Hence  the 
same  strong  and  independent  industries  could 
certainly  still  better  support  the  whole  population, 
if  they  supported  it  directly.  - 

124.  I  have  been  asked  whether  we  should  have 
had  any  steel-works  in  this  country,  if  we    had 
had  no  protection.     I  reply  that  I  do  not  know  ; 
neither  does  any  body  else,  but  it  is  certain  that 
we  should  have  had  a  great  deal  more  steel,  if  we 
had  had  no  protection. 

125.  "  But/'  it  is  said,  "  we  should  import  every 
thing."     Should  we  import  every  thing  and   give 
nothing?     If  so,  foreigners  would  make  us  pres- 
ents and  support  us.     Should  we  give  equal  value 
in  exchange?     If  so,  there  would  be  just  as  much 
"  industry  "  and  a  great  deal  less  "  work  "  in  that 
way  of  getting  things  than  in   making  them  our- 
selves.     The  moment  that  ceased  to  be  true  we 
should  make  and  not  buy.     Suppose    that  a  dis- 
trict, A,  has  two  million  inhabitants,  one  million 
of  whom  produce  a  million  bushels  of  wheat,  and 


THE  GAIN  BY  TRADE.  133 

one  million  produce  a  million  hundred  weight  of 
iron ;  and  suppose  that  a  bushel  of  wheat  ex- 
changes for  a  hundred  weight  of  iron.  Now,  by 
improved  transportation  and  emigration,  suppose 
that  a  new  wheat  country,  B,  is  opened,  and  that 
its  people  bring  wheat  to  the  first  district,  offering 
two  bushels  for  a  hundred  weight  of  iron.  Plainly 
they  must  offer  more  than  one  bushel  for  one  hun- 
dred weight,  or  it  is  useless  for  them  to  come. 
Now  the  people  of  A,  by  putting  all  their  labor  and 
capital  in  iron  production,  produce  two  million 
hundred  weight.  They  keep  one  million  hundred 
weight,  and  exchange  one  million  hundred  weight 
of  iron  for  two  million  bushels  of  wheat.  The 
destruction  of  their  wheat  industry  is  a  sign  of  a 
change  in  industry  (unifying  and  not  diversifying) 
by  which  they  have  gained  a  million  bushels  of 
wheat.  Such  is  the  gain  of  all  trade.  If  the  gain 
did  not  exist  trade  would  not  be  a  feature  of  civili- 
zation, 


134  PRO  TECTIONISM. 

(/.)  That  it  would  be  wise  to  call  into  existence 
various  industries,  even  at  an  expense,  if  we 
could  thus  offer  employment  to  all  kinds  of  artisans, 
etc.,  who  might  come  to  us. 

126.  This   would    be    only    maintaining  pub- 
lic    workshops     at    the    expense     of    the     tax- 
payers,   and   would    be    open    to   all    the   objec- 
tions which  are  conclusive  against  public  work- 
shops.    The    expense  would  be  prodigious,  and 
the    return    little    or   nothing.     This    argument 
shows  less    sense  of   comparative  cost  and  gain 
than  any  other  which  is  ever  proposed. 

(K.)  That  we  want  to  be  complete  in  ourselves 
and  sufficient  to  ourselves,  and  independent,  as  a 
nation,  which  state  of  things  will  be  produced  by 
protection. 

127.  I  will  only  refer  to  what  I  have  already 
said  about  China  and  Japan  (§  69)  as  types  of 
what  this  plan  produces.     If  a  number  of  families 
from    among    us    should  be  shipwrecked   on  an 
island,  their  greatest  woe  would  be  that  they  could 
not  trade  with  the  rest  of  the  world.     They  might 
live  there  " self-contained "  and  "independent," 


I  SOL  A  TION  AND  INDEPENDENCE.          135 

fulfilling  the  ideal  of  happiness  which  this  propo 
sition  offers,  but  they  would  look  about  them  to 
see  a  surfeit  of  things,  which,  as  they  know,  their 
friends  at  home  would  like  to  have,  and  they 
would  think  of  all  the  old  comforts  which  they 
used  to  have,  and  which  they  could  not  produce 
on  their  island.  They  might  be  contented  to  live 
on  there  and  make  it  their  home,  if  they  could 
exchange  the  former  things  for  the  latter.  If  now 
a  ship  should  chance  that  way  and  discover  them 
and  should  open  communication  and  trade  be- 
tween them  and  their  old  home,  a  protectionist 
philosopher  would  say  to  them  :  "  You  are  mak- 
ing a  great  mistake.  You  ought  to  make  every 
thing  for  yourselves.  The  wise  thing  to  do  would 
be  to  isolate  yourselves  again  by  taxes  as  soon  as 
possible.0  We  sent  some  sages  to  the  Japanese 
to  induct  them  into  the  ways  of  civilization,  who, 
as  a  matter  of  fact,  did  tell  them  that  the  first 
step  in  civilization  was  to  adopt  a  protective  tar- 
iff and  shut  up  again  by  taxes  the  very  ports 
which  they  had  just  opened, 


136  PROTECTIONISM 

(L.)  That  protective  taxes  are  necessary  to  pre- 
vent a  foreign  monopoly  from  getting  control  of  our 
market. 

128.  It    is    said    that    English    manufacturers 
once  combined  to  lower  prices  in  order  to  kill  out 
American  manufactures,  and  that  they  then  put 
up  their  prices  to  monopoly  rates.     If  they  did 
this,  why  did  not  their  other  customers  send  to 
the  United  States  and  buy  the  goods  here  in  the 
first  instance,  and  why  did  not  the  Americans  go 
and    buy  the    goods  of   the   Englishmen's  other 
customers  in  the  second  instance?   If  the  English- 
men put  down  their  prices  for  their  whole  market 
in   the  first    instance,  why  did  they  not  incur  a 
great    loss  ?    and,    if    they    raised    it    for    their 
whole    market    in  the  second    instance,  why  did 
they   not  yield   the  entire  market  to  their  com- 
petitors ?     The  Englishmen  are  said  to  be  won- 
derfully shrewd,  and  are  here  credited  with  the 
most  stupid  and  incredible  folly. 

129.  The  protective  system  puts  us  certainly  in 
the  hands  of  a  home  monopoly  for  fear  of  the 
impossible    chance   that   we    may   fall   into    the 
hands  of    a  foreign  monopoly.     Before  the  war 


SAL  VA  TION  FROM  MONOPOL  Y.  137 

we  made  no  first  quality  thread.  We  got  it  at 
four  cents  a  spool  (retail)  of  an  English  monopoly. 
Under  the  tariff  we  were  saved  from  this  by  beir.r; 
put  into  the  hands  of  a  home  monopoly  which 
charged  five  cents  a  spool.  In  the  meantime  the 
foreign  monopoly  lowered  thread  to  three  cents  a 
spool  (retail)  for  the  Canadians,  who  were  at  its 
mercy.  Lest  we  should  have  to  buy  nickel  of  a 
foreign  monopolist,  Congress  forced  us  to  buy  it 
of  the  owner  of  the  only  mine  in  the  United 
States,  and  added  thirty  cents  a  pound  to  any 
price  the  foreigner  might  ask. 

(M.)  That  free  trade  is  good  in  theory  but  im- 
possible in  practice  ;  that  it  ^vould  be  a  good  thing  if 
all  nations  would  have  it. 

130.  That  a  thing  can  be  true  in  theory  and 
false  in  practice  is  the  most  utter  absurdity 
that  human  language  can  express.  For,  if  a 
thing  is  true  in  practice  (protectionism,  for  in- 
stance) the  theory  of  its  truth  can  be  found, 
and  that  theory  will  be  true.  But  it  was  admitted 
that  free  trade  is  true  in  theory.  Hence  two 
things  which  are  contradictory  would  both  be 
true  at  the  same  time  about  the  same  thing.  The 


138  PROTECTIONISM. 

fact  is,  that  protectionism  is  totally  impracticable. 
It  does  network  as  it  is  expected  to  work ;  it 
does  not  produce  any  of  the  results  which  were 
promised  from  it ;  it  is  never  properly  and  finally 
established  to  the  satisfaction  of  its  own  votaries. 
They  can  not  let  it  alone.  They  always  want  to 
"  correct  inequalities,"  or  revise  it  one  way  or  an- 
other. It  was  they  who  got  up  the  Tariff  Com- 
mission of  1882.  Their  system  is  not  capable  of 
construction  so  as  to  furnish  a  normal  and  regular 
status  for  industry.  One  of  them  said  that  the 
tariff  would  be  all  right  if  it  could  only  be  made 
stable;  another  said  that  it  ought  to  be  revised 
every  two  years.  One  said  that  it  ought  to  in- 
clude every  thing ;  another  said  that  it  would  be 
good  "  if  it  was  only  laid  on  the  right  things." 

131.  If  all  nations  had  free  trade,  no  one  of 
them  would  have  any  special  gain  from  it,  just  as, 
if  all  men  were  honest,  honesty  would  have  no 
commercial  value.  Some  say  that  a  man  can  not 
afford  to  be  honest  unless  every  body  is  honest. 
The  truth  is  that,  if  there  was  one  honest  man 
among  a  lot  of  cheats,  his  character  and  reputa- 
tion would  reach  their  maximum  value.  So  the 
nation  which  has  free  trade  when  the  others  do 


FREE  TRADE  LIKE  HONESTY.  139 

not  have  it,  gains  the  most  by  comparison  with 
them.  It  gains  while  they  impoverish  themselves. 
If  all  had  free  trade  all  would  be  better  off,  but 
then  no  one  would  profit  from  it  more  than  others. 
If  this  were  not  true,  if  the  man  who  first  sees  the 
truth  and  first  acts  wisely  did  not  get  a  special 
premium  for  it,  the  whole  moral  order  of  the  uni- 
verse would  have  to  be  altered,  for  no  reform  or 
improvement  could  be  tried  until  unanimous  con- 
sent was  obtained.  If  a  man  or  a  nation  does 
right,  the  rewards  of  doing  right  are  obtained. 
They  are  not  as  great  as  could  be  obtained  if  all 
did  right,  but  they  are  greater  than  those  enjoy 

who  still  do  wrong. 

X 

(N.)  That  trade  is  WAR,  so  that  free  trade  methods 
are  unfit  for  it,  and  that  protective  taxes  are  suited 
to  it. 

132.  It  is  evidently  meant  by  this  that 
trade  involves  a  struggle  or  contest  of  com- 
petition. It  might,  however,  as  well  be  said  that 
practicing  law  is  war,  because  it  is  contentious; 
or  that  practicing  medicine  is  war,  because  doctors 
are  jealous  rivals  of  each  other.  The  protection- 
ists do,  however,  always  seem  to  think  of  trade 


140  PROTECTIONISM. 

as  commercial  war.  One  of  them  was  reported 
to  have  said  in  a  speech  in  the  late  campaign,  that 
nations  would  riot  fight  any  more  writh  guns  but 
with  taxes.  The  nations  are  to  boycott  each 
othen  One  would  think  that  the  experience  our 
southerners  made  of  that  notion  in  the  civil  war, 
upori  which  they  entered  in  the  faith  that  "  cotton 
is  king,"  would  have  sufficed  to  banish  forever 
that  antique  piece  of  imbecility,  a  commercial 
war.  If  trade  is  war,  all  the  tariff  can  do  about  it 
is  to  make  A  fight  B's  battles,  although  A  has  his 
own  battles  to  fight  besides. 

(O.)  That  protection  brings  into  employment  labor 
and  capital  which  ivould  otherwise  be  idle. 

133.  If  there  is  any  labor  or  capital  which  is 
idle  that  fact  is  a  symptom  of  industrial  disease; 
especially  is  this  true  in  the  United  States.  If  a 
laborer  is  idle  he  is  in  danger  of  starving  to  death. 
If  capital  is  idle  it  is  producing  nothing  to  its  owner, 
who  depends  on  it,  and  is  suffering  loss.  There- 
fore, if  labor  or  capital  is  idle,  some  antecedent  error 
or  folly  must  have  produced  a  stoppage  in  the 
industrial  organization.  The  cure  is,  not  to  lay 
some  more  taxes,  but  to  find  the  error  and  cor- 


GREA  TER  ECOMOM  Y.  141 

feet  it.  If  then  things  are  in  their  normal  and 
healthy  condition,  the  labor  and  capital  of  the 
country  are  employed  as  far  as  possible  under  the 
existing  organization.  We  are  constantly  trying 
to  improve  our  exchange  and  credit  systems  so  as 
to  keep  all  our  capital  all  the  time  employed. 
Such  improvements  are  important  and  valuable, 
but  to  make  them  costs  more  thought  and  skill" 
ful  labor  than  to  invent  machines.  Hence  Con- 
gress can  not  do'  that  work  by  discharging  a  volley 
of  taxes  at  selected  articles,  and  leaving  those 
taxes  to  find  out  the  proper  points  to  affect,  and 
to  exert  the  proper  influence.  It  takes  intelligent 
and  hard  working  men  to  do  it.  The  faith  t!::  t 
any  thing  else  can  do  it  is  superstition. 

(P.)  That  a  young  nation  needs  protection  a  nd  i.  7,  ' 
suffer  some  disadvantage  in  free  exdiaugc  with  en 
old  one. 

134.  The  younger  a  nation  is  the  rhcro 
important  trade  is  to  it  (cf.  §  127,  fg).  The 
younger  a  nation  is  the  more  it  wins  by  trade,  for 
it  offers  food  and  raw  materials  which  are  objects 
of  greatest  necessity  to  old  nations.  The  things 
England  buys  of  us  are  far  more  essential  to  her 


14*  PROTECTIONISM. 

than  what  she  buys  of  France  or  Germany.  The 
strong  party  in  an  exchange  is  not  the  rich  party, 
or  the  old  party,  but  the  one  who  is  favored  by 
supply  and  demand, — the  one  who  brings  to  the 
exchange  the  thing  which  is  more  rare  and  more 
eagerly  wanted.*  If  a  poor  woman  went  into 
Stewart's  store  to  buy  a  yard  of  calico,  she  did  not 
have  to  pay  more  because  Stewart  was  rich.  She 
paid  less  because  he  used  his  capital  to  serve  her 
better  and  at  less  price  than  any  body  else  could. 
England  takes  60  per  cent,  of  all  our  exports. 
We  sell,  1st,  wheat  and  provisions,  prime  articles 
of  food ;  2d,  cotton,  the  most  important  raw 
material  now  used  by  mankind ;  3d,  tobacco,  the 
most  universal  luxury  and  the  one  for  which  there 
is  the  intensest  demand  ;  4th,  petroleum,  the  light- 
ing material  in  most  universal  use.  These  are 
things  which  are  rare  and  of  high  demand.  We 
are,  therefore,  strong  in  the  market.  Protection 
only  robs  us  of  part  of  our  advantage  (§  1 16). 

(Q.)   That  we  need  protection  to  get   ready  for 
war. 

135.  We  have  no  army,  or  navy,  or  fortifications 

*  See   a   fallacy   under  this   point :  Cunningham,   Growth  of 
English  Industry,  410  note. 


GET  AS  RICH  AS  WE  CAN.  143 

worth  mentioning.  We  are  wasting  more  by  pro-  i 
tective  taxes  in  a  year  than  would  be  necessary  to 
build  a  first-class  navy  and  fortify  our  whole  sea- 
coast.  It  is  said  that,  in  some  way,  the  taxes  get 
us  ready  for  war,  and  yet  in  fact  we  are  not  ready 
for  war.  It  is  plain  that  this  argument  is  only  a 
pretense  put  forward  to  try  to  cover  the  real 
motives  of  protection.  If  we  prefer  to  go  without 
army,  navy,  and  fortifications,  as  we  now  do,  then 
the  best  way  to  get  ready  for  war,  consistently 
with  that  policy,  is  to  get  as  rich  as  we  can.  Then 
we  can  count  on  buying  any  thing  in  the  world 
which  any  body  else  has  got,  which  we  need. 
Protection,  then,  which  lessens  our  wealth,  is  only 
diminishing  our  power  for  war. 

(R.)  That  protectionism  produces  some  great 
moral  advantages. 

136.  It  is  a  very  suspicious  thing  when  a  man 
who  sets  out  to  discuss  an  economic  question 
shifts  over  on  the  "moral  "  ground.  Not  because 
economics  and  morals  have  nothing  to  do  with 
each  other.  On  the  contrary,  they  meet  at  a 
common  boundary-line,  and,  when  both  are 
sound,  straight  and  consistent  lines  run  from  one 


144  PROTECTIONISM. 

into  the  other.  Capital  is  the  first  requisite  of  all 
human  effort  for  goods  of  any  kind,  and  the  in- 
crease of  capital  is  therefore  the  expansion  of 
chances  that  intellectual,  moral,  and  spiritual  good 
may  be  won.  The  moral  question  is  :  How  will 
the  chances  be  used?  If  then  the  economic 
analysis  shows  that  protective  taxes  lessen  capital,' 
it  follows  that  those  taxes  lessen  the  regular 
chances  for  all  higher  good. 

137.  It  is  argued  that  hardship  disciplines  a 
man  and  is  good  for  him ;  hence,  that  the  free- 
traders, who  want  people  to  do  what  is  easiest, 
would  corrupt  them,  and  that  protectionists,  by 
"  making  work/'  bring  in  salutary  discipline  for 
the  people.  This  is  the  effect  upon  those  who 
pay  the  taxes.  The  counter  operation  on  the 
beneficiaries  of  the  system  I  have  never  seen  de- 
veloped. Bastiat  said  that  the  model  at  which 
the  protectionist  was  aiming,  was  Sisyphus,  who 
was  condemned  in  Hades  to  roll  a  stone  to  the  top 
of  a  hill,  from  which,  as  soon  as  he  got  it  there,  it 
rolled  down  again  to  the  bottom.  Then  he  rolled 
it  up  again,  and  so  on  to  all  eternity.  Here  then 
was  infinity  of  effort,  zero  of  result ;  the  ultimate 
type  to  which  the  protectionist  system  would 


MORAL  GAINS.  145 

come.  Somebody  pitied  Sisyphus,  to  whom  he 
replied  :  "  Thou  fool !  I  enjoy  everlastiiig  hope  !  " 
If  Sisyphus  could  extract  moral  consolation  from 
his  case,  I  am  not  prepared  to  deny  but  that  a 
New  England  farmer,  ground  between  the  upper 
mill-stone  of  free  competition,  in  his  production, 
with  the  Mississippi  Valley,  and  the  nether  mill- 
stone of  protective  taxes  on  all  his  consumption, 
may  derive  some  moral  consolation  from  his  case. 
There  are  a  great  many  people  who  are  ap- 
parently ready  to  inflict  salutary  chastisement  on 
the  American  citizen  for  his  welfare — and  their 
own  advantage. 

138.  The  protectionist  doctrine  is  that  if  my 
earnings  are  taken  from  me  and  given  to  my  neigh- 
bor, and  he  spends  them  on  himself ",  there  will  be 
important  moral  gains  to  the  community  which  will 
be  lost  if  I  keep  my  own  earnings,  and  spend  them 
on  myself.  The  facts  of  experience  are  all  to  the 
contrary.  When  a  man  keeps  his  own  earnings 
he  is  frugal,  temperate,  prudent,  and  honest. 
When  he  gets  and  lives  on  another  man's  earnings, 
he  is  extravagant,  wasteful,  luxurious,  idle,  and 
covetous.  The  effects  on  the  community  in  either 
correspond. 


146  PROTECTIONISM. 

139.  The  truth  is  that  protectionism  demoralizes 
and  miseducates  a  people  (§§  89,  153,  155).  It 
deprives  them  of  individual  self-reliance  and 
energy,  and  teaches  them  to  seek  crafty  and  un- 
just advantages.  It  breaks  down  the  skill  of  great 
merchants  and  captains  of  industry,  and  develops 
the  skill  of  lobbyists.  It  gives  faith  in  monopoly, 
combinations,  jobbery,  and  restriction,  instead  of 
giving  faith  in  energy,  free  enterprise,  public 
purity  and  freedom.  Illustrations  of  this  occur 
all  the  time.  Objection  has  been  made  to  the 
introduction  of  machines  to  stop  the  smoke 
nuisance  because  they  would  interfere  in  the  com- 
petition of  anthracite  and  bituminous  coal.  People 
have  resisted  the  execution  of  ordinances  against 
gambling-houses  because  said  houses  "  make 
trade "  for  their  neighbors.  The  theater  men 
recently  made  an  attempt  to  get  regulations 
adopted  against  skating  rinks, — purely  on  moral 
grounds.  The  industries  of  the  country  all  run 
to  the  form  of  combinations.*  Our  wisdom  is  de- 
veloped, not  in  the  great  art  of  production,  but  in 


*  See  an  interesting  collection  of  illustrations  in  an  article  on 
*'  Lords  of  Industry  "  in  the  North  American  Review  for  June, 
1884.  The  futile  criticisms  at  the  end  of  the  article  do  not  affect 
the  value  of  the  facts  collected. 


HISTORICAL  ECONOMICS.  147 

the  tactics  of  managing  a  combination,  and  while 
we  sustain  all  the  causes  and  all  the  great  prin- 
ciples of  this  system  of  business  we  denounce 
"  monopoly  "  and  "  corporations." 

(S.)  That  a  "  worker  may  gain  more  by  having  his 
industry  protected  than  he  will  lose  by  having  to 
pay  dearly  for  what  he  consumes.  A  system  which 
raises  prices  all  round — like  that  in  the  United 
States  at  present — is  oppressive  to  consumers,  but  is 
most  disadvantageous  to  those  who  consume  without 
producing  any  thing,  and  does  little,  if  any,  injury 
to  those  who  produce  more  than  they  consume" 

140.  This  is  an  English  contribution  to  the 
subject  dropped  in  passing  by  a  writer  on 
economic  history.*  It  is  a  note-worthy  fact 
that  .the  "  historical  economists "  and  others 
who  deride  political  economy  as  a  science 
do  not  desist  from  it,  but  at  once  set  to 
work  to  make  very  bad  political  economy  of 
the  "  abstract  "  or  "  deductive  "  sort.  The  pas- 
sage quoted  involves  three  or  four  fallacies  already 


*  Cunningham,   Growth   of  English  Industry  and  Commerce, 
316,  note  2.     (See  also  g§  114,  134.) 


148  PROTECTIONISM. 

noticed,  and  an  assumption  of  the  truth  of  pro- 
tectionism as  a  philosophy.     As  we  have  abund- 
antly established,  "  workers"  gain  nothing  by  pro- 
tection in  their  production  (§  48.)     Also,  "  a  sys- 
tem which  raises  prices  all  around  "   must  either 
lessen  the  demand  and  requirement  for  money, 
i.  e.y  restrict  business  and  the   supply  of  goods 
(§  112),  or  it  must  increase  the  amount  of  money. 
In   the    former    case   it    could    not    but    injure 
" workers;"  in   the   latter  case   we   should   find 
ourselves     dealing    with     a     greenback    fallacy. 
But    passing   by   that,    who   are   they   who    con- 
sume   more    than   they    produce  ?     I    can  think 
only  of  i)    princes,    pensioners,    sinecurists,  pro- 
tected persons,  and  paupers,  who    draw   support 
from  taxes,  and  2)  swindlers,  confidence  men  and 
others  who  live  by  their  wits  on  the  produce  of 
others.       Those  under  i),    if   they  receive   fixed 
money   grants  or  subsidies,    find  an  advance  in 
price  most  disadvantageous.     So  the   protected, 
of  course,  as  consumers  of  others*  products,  when 
they  spend  what  they  have  received  by  protection, 
suffer.     Who  are  they  who   produce   more   than 
they  consume  ?     I  can  think  only  of  i)  tax-payers, 
2)  victims  of  fraud  and  of   those  economic 


CONSUMERS  AND  PRODUCERS.  149 

errors  which  give  one  man's  earnings  to  another's 
use.  Rise  in  price  is  just  as  advantageous  to  this 
class  as  it  was  disadvantageous  to  the  other,  on 
the  same  hypothesis,  viz.,  if  they  pay  fixed  money 
taxes  to  the  parasites,  and  can  sell  their  products 
for  more  money.  Evidently  the  writer  did  not 
understand  correctly  what  his  two  classes  con- 
sisted of,  and  he  put  the  protected  "  workers  "  in 
the  wrong  one.  If  in  industry  a  person  should 
produce  more  than  he  consumes,  he  could  give  it 
away,  or  it  would  decay  on  his  hands.  If  he 
should  consume  more  than  he  produced,  he  would 
run  in  debt  and  become  bankrupt*  Protection 
has  nothing  to  do  with  that. 


That  "a  duty  may  at  once  protect  the 
native  manufacturer  adequately,  and  recoup  the 
country  for  the  expense  of  protecting  him'' 

141.  This  is  Professor  Sidgwick's  doctrine.f 
It  has  given  great  comfort  to  our  protectionists 
because  it  is  put  forward  by  an  Englishman  and 
a  Cambridge  professor.  It  is  offered  under  the 
"art"  of  political  economy.  It  is  a  new  thing; 

*  Mill's  Political  Economy,  bk.  I,  ch.  5,  §  5.     Cairnes,  Leading 
Principles,  chap.  I,  §  5. 

|  Political  Economy,  491-2. 


150  PROTECTIONISM. 

an  h  priori  art.  The  "may"  in  it  deprives  it 
of  the  character  of  a  doctrine  or  dogma  such  as 
our  less  cultivated  protectionists  give  us  :  "  Pro- 
tective taxes  come  out  of  the  foreigner,"  but 
it  is  not  a  maxim  of  art.  It  has  the  air  of  a 
very  astute  contrivance  (see  §  3),  and  is  there- 
fore very  captivating  to  many  people,  and  it 
is  very  difficult  to  dissect  and  to  expose  in  a 
simple  and  popular  way.  It  has  therefore  given 
great  trouble  and  done  great  mischief.  It  is,  how- 
ever, a  complete  error.  It  is  not  possible  in  any 
way  or  in  any  degree  to  use  duties  so  as  to  make 
the  foreigner  pay  for  protection. 

142.  Professor  Sidgwick  states  the  hypothetical 
case  which  he  sets  up  to  prove  by  illustration  that 
there  "may"  be  such  a  case,  as  follows:  "Sup- 
pose that  a  five  per  cent,  duty  is  imposed  on 
foreign  silks,  and  that,  in  consequence,  after  a  cer- 
tain interval,  half  the  silks  consumed  are  the  pro- 
duct of  native  industry,  and  that  the  price  of  the 
whole  has  risen  2^  per  cent.  It  is  obvious  that, 
under  these  circumstances,  the  other  half  which 
comes  from  abroad  yields  the  State  five  per  cent., 
while  the  tax  levied  from  the  consumers  on  the 
whole,  is  only  2^  per  cent. ;  so  that  the  nation, 


MAKING  FOREIGNERS  PAY.  151 

in  the  aggregate,  is  at  this  time  losing  nothing  by 
protection,  except  the  cost  of  collecting  the  tax, 
while  a  loss  equivalent  to  the  whole  tax  falls  on 
the  foreign  producer/' 

143.  It  is  necessary,  in  the  first  place,  to  com- 
plete the  hypothesis  which  is  included  in  this 
case.  Let  us  assume  that  the  consumption  of 
silk,  when  all  was  imported,  was  100  yards  and 
that  the  price  was  $1.00  per  yard.  Then  the 
following  points  are  taken  for  granted  although 
not  stated  in  the  case  as  it  is  put :  i)  That  the 
state  needs  $5  revenue  ;  2)  that  it  has  determined 
to  get  this  out  of  the  consumers  of  silk  ;  3)  that 
the  advance  in  price  does  not  diminish  the  con- 
sumption ;  4)  that  the  tax  forces  a  reduction  of 
price  for  the  silk  in  the  whole  outside  market ; 
5)  that  the  "silk"  in  question  is  the  same  thing 
after  the  tax  is  laid  as  before.  Of  these  assump- 
tions, 3,  4,  and  5  are  totally  inadmissible,  but,  if 
they  be  admitted  in  the  first  instance,  and  if  the 
doctrine  of  the  case  which  is  put  be  deduced,  it 
is  this :  If  the  part  imported  multiplied  by  the 
tax  is  equal  to  the  total  consumption  multiplied 
by  the  advance  in  price,  the  consumers  can  pay 
the  latter  in  protection,  for  it  is  equal  to  the 


152  PROTECTIONISM. 

former,  and  the  former,  which  is  paid  to  the 
government  by  the  foreigner,  is  what  the  con- 
sumers of  silk  must  otherwise  have  paid. 

144.  Obviously  this  deduction  is  arithmetically 
incorrect,  even  on  the  hypothesis.  In  the  first 
place,  the  government  has  not  obtained  $5  revenue 
which  it  needed,  but  $2.50  (5  cts.  on  50  yards). 
In  the  second  place,  the  foreigner  sells  at  $1.02^ 
(net  97^)  the  silk  which  he  used  to  sell  for  $1.00. 
He  therefore  gets  back  from  the  consumers 
2^/2,  cts.  per  yard  on  50  yards,  or  $1.25  out  of  the 
$2.50  which  he  has  paid  to  the  government.  Also, 
the  domestic  silk  to  compete  must  be  equal  to 
the  dollar  imported  silk  which  now  sells  for 
$1.02^.  Hence,  the  consumers  really  pay  in 
protection  only  2^/2,  cts.  on  50  yards,  i.e.  $1.25. 
This  case  then  is,  that  the  foreigner  pays  $1.25 
revenue,  and  the  consumers  pay  $1.25  revenue 
and  $i.  25  protection.  Hence  the  result  is  not  at 
all  what  is  asserted,  and  there  is  no  such  opera- 
tion of  the  contrivance  as  was  expected.  But 
the  government  needs  $2.50  more  revenue,  the 
operation  of  its  tax  having  been  interfered  with . 
by  protection.  As  there  is  no  equivalence  or 
compensation  in  the  case  as  it  already  stands,  it 


REAL  EFFECT  ON  PRODUCTION.  153 

is  evident  that  the  effect  of  any  further  tax, 
instead  of  bringing  about  equivalence  or  compen- 
sation, will  be  to  depart  from  such  a  result  still 
further. 

145.  It  is,  however,  impossible  to  admit  assump. 
tions  3,  4,  and  5  above,  or  to  deal  with  any 
economic  problem  by  any  arithmetical  process. 
The  result  above  reached  is  totally  incorrect 
and  only  serves  to  clear  the  ground  for  a  correct 
analysis.  The  producer  may  have  to  bear  part 
of  a  tax,  if  he  is  under  the  tax  jurisdiction,  or 
if  he  has  a  monopoly.  If  he  has  no  monopoly, 
and  is  not  under  the  tax  jurisdiction,  and 
works  for  the  world's  market,  he  can  not  lower 
his  price  in  order  to  assume  part  of  the  tax. 
What  he  does  is  that  he  differentiates  his  com- , 
modity.  This  is  the  fact  in  the  art  of  produc- 
tion which  is  established  by  abundant  experi- 
ence. It  is  the  explanation  of  the  constant 
complaint,  under  the  protective  system,  of "  fraud7' 
and  of  the  constant  demand  for  sub-classification  . 
in  the  tariff  schedules.  The  protected  product  y 
never  is,  at  least  at  first,  as  good  in  quality  as  the  ' 
imported  article  which  it  aims  to  supersede. 
Herice  the  foreigner,  if  he  desires  to  retain  the 


154  PROTECTIONISM. 

protected  market,  can  prepare  a  special  quality 
for  that  market.  The  "  silk  "  after  the  tax  is  laid 
is  not  the  same  silk  as  before.  It  nets  to  the 
foreign  producer  97^  cents,  and  pays  him  busi- 
ness profits  at  that  price.  Therefore  when  he 
sells  it  at  $I.O2J4  he  gets  back  the  whole  tax 
from  the  consumers.  The  domestic  silk  sold  at 
$i.O2T/4  is  no  better  than  might  have  been  obtained 
for  97^  cents.  Hence  the  consumers  are  paying 
a  tax  for  protection  which  is  full  and  equal  to 
the  revenue  rate.  The  fact  that  the  price  has 
fallen  to  $1.02^,  and  is  not  $1.05,  evidently 
proves  that  instead  of  disproving  it,  as  many 
believe. 

146.  Thus  this  case  falls  to  pieces.  It  gains  a 
momentary  plausibility  from  the  erroneous  as- 
sumptions which  are  implicit  in  it.  The  foreign 
producer  may  suffer  a  narrowing  of  his  market 
and  a  reduction  of  his  aggregate  profits,  but  there 
is  no  way  to  make  him  tributary  (unless  he  has  a 
monopoly)  either  to  the  treasury  or  the  protected 
interests  of  the  taxing  country.*  If  it  was  true 
in  general,  or  in  any  limited  number  of  cases,  that 

*  I  published  a  criticism  of  this  case  in  the  London  Economist, 
Dec.  i,  1883. 


TRIE  UTE  PAID  B  Y  ENGLAND.  1 5 5 

a  country  which  lays  protective  taxes  can  make 
foreigners  pay  those  taxes,  then  England,  which 
has  had  no  protective  taxes  since  (say)  1850,  and 
has  been  surrounded  by  countries  which  have  had 
more  or  less  protective  taxes,  must  have  been 
paying  tribute  to  them  all  this  time  and  must 
have  been  steadily  impoverished  accordingly. 


CHAPTER  V. 
SUMMARY  AND   CONCLUSION. 

147.  I  have  now  examined  protectionism  im- 
partially on  its  own  grounds,  assuming  them  to 
be  true,  and  adversely  from  ground  taken  against 
it,  and  have  reviewed  a  series  of  the  commonest 
arguments  put  forward  in  its  favor.  If  now  we 
return,  with  all  the  light  we  have  obtained,  to 
test  the  assumptions  which  we  found  in  protec- 
tionism, that  the  people  would  not  organize  their 
industry  wisely  under  liberty,  and  that  protective 
taxes  are  the  correct  device  for  bringing  about  a 
better  organization,  we  find  that  those  two  as- 
sumptions are  totally  false  and  have  no  semblance 
of  claim  upon  our  confidence.  At  every  step  the 
dogmas  of  protectionism,  its  claims,  its  apparatus, 
have  proved  fallacious,  absurd,  and  impracticable. 
We  can  now  group  together  some  general  criti- 
cisms of  protectionism  which  our  investigation 
suggests. 


WASTE  MAKES  WEALTH.  157 

148.  We  have  taken  the  protectionist's  own  defi- 
nition of  a  protective  duty,  and  have  found  that 
such  a  duty,  instead  of  increasing  national  wealth, 
must,  at  every  step,  and  by  every  incident  of 
its  operation,  waste  labor  and  capital,  lower  the 
efficiency  of  the  national  industry,  weaken  the 
country  in  trade,  and  consequently  lower  the 
standard  of  comfort  of  the  whole  population. 
We  have  found  that  protected  industries,  accord- 
ing to  the  statement  of  the  protectionists,  do  not 
produce,  but  consume.  If  then  these  industries 
are  the  ones  which  make  us  rich,  consumption  is 
production  and  destruction  produces.  The  object  of  a 
protective  duty  is  "to  effect  the  diversion  of  a  part 
of  the  capital  and  labor  of  the  people  out  of  the 
channels  in  which  it  would  run  otherwise,  into 
channels  favored  or  created  by  law"  (§13).  We 
have  seen  that  the  channels  into  which  the  labor 
and  capital  of  the  people  are  to  be  diverted  are 
offered  by  the  industries  which  do  not  pay.  Hence 
protectionism  is  found  to  mean  that  national 
prosperity  is  to  be  produced  by  forcing  labor  and 
capital  into  employments  where  the  capital  can 
not  be  reproduced  with  the  same  increase  which 
could  be  won  by  it  elsewhere.  If  that  is  so,  then 


158  PROTECTIONISM. 

capital  in  those  employments  will  be  wasted,  and 
the  final  outcome  of  our  investigation,  which  must 
be  made  the  primary  maxim  of  the  art  of  national 
prosperity  under  protectionism,  is  that  Waste 
makes  Wealth.  ^  Such  is  its  outcome  when  regarded 
as  an  economic  philosophy. 

149.  As  regards  the  social  and  jural  relations 
which  are  established  between    citizen   and  citi- 
zen,   protectionism    is    proved    by   a  half-dozen 
independent  analyses  of  it  to  be  simply  a  device 
for  forcing  us  to  levy  tribute  on  each   other.     If 
the  law  brings  a  cent  to  A  it  must  have  taken  it 
from  B,  or  else  it  must  have  produced  it  out  of 
nothing,  that   is,  it   must  be  magic.     Every  soul 
pays  protective  taxes.     If  then  any  body  gets  any 
thing  from    them,   he   needs  to  remember  what 
they  cost  him,  and  he  should  insist  on  casting  up 
both  sides  of  the  account.    If  any  body  gets  nothing 
from    them,  then   he  pays  the  taxes  and  gets  no 
equivalent. 

150.  During  the  anti-corn-law  campaign   in  En- 
gland, a  writer  in  the  Westminster  Review  illus- 
trated protectionism  by  the  story  of  the  monkeys 
in  a  cage,  each  of  whom  received  for  his  dinner  a 
piece  of  bread.     Each  monkey  dropped  his  own 


MUTUAL  GRABBING.  159 

piece  of  bread  and  grabbed  his  neighbor's.  The 
consequence  was  that  soon  the  floor  of  the  cage 
was  strewn  with  fragments,  and  each  monkey  had 
to  make  the  best  dinner  he  could  from  these.  It 
is  a  good  and  fair  illustration.  I  saw  a  story  re- 
cently in  a  protectionist  newspaper  about  the 
peasants  in  the  Soudan.  Each  owns  pigeons,  and 
at  evening,  when  the  pigeons  come  home,  each 
tries  to  entice  as  many  of  his  neighbor's  pigeons 
as  he  can  into  his  own  pigeon-house.  "  All  of 
them  do  the  same  thing,  and  therefore  each  gets 
caught  in  his  turn.  They  know  this  perfectly 
well,  but  no  Egyptian  fellah  could  resist  the 
temptation  of  cheating  his  neighbor/'  They  ought 
to  tax  each  other's  pigeons  all  around.  Then 
they  would  put  themselves  at  once  on  the  level  of 
free  and  enlightened  Americans.  The  protection- 
ist assures  me  that  it  is  for  the  good  of  the  com- 
munity and  for  my  good  that  he  should  tax  me.  I 
reply  that,  in  his  language,  "  these  are  fine  theo- 
ries," but  that  whether  it  is  good  for  the  com- 
munity or  not,  and  whether  it  is  good  for  me  or 
not,  that  he  should  tax  me,  I  can  see  that  it  is 
for  his  good  that  he  should  tax  me.  Then  he 
says  :  "  Now  you  are  abusive." 


160  PROTECTIONISM. 

151.  If  Protectionism  is  any  thing  else  than  mu- 
tual tribute,  then  it  is  magic.  The  whole  philoso- 
phy of  it  comes  down  to  questions  like  this  :  How 
much  can  I  afford  to  pay  a  man  for  hiring  me  ? 
How  much  can  I  afford  to  pay  a  man  for  trading 
with  me  ?  How  much  can  I  afford  to  pay  a  man 
to  cease  to  compete  with  me  in  my  production  ? 
How  much  can  I  afford  to  pay  a  man  to  go  and 
compete  with  those  who  supply  me  my  consump- 
tion ?  It  is  only  an  expensive  way  to  get  ivhat  we 
could  get  for  nothing  if  it  was  worth  having  (§  89).  It 
is  admitted  that  one  man  can  not  lift  himself 
by  his  boot-straps.  Suppose  that  a  thousand  men 
stand  in  a  ring  and  each  takes  hold  of  the  other's 
boot-straps  reciprocally  and  they  all  lift,  can  the 
whole  group  lift  itself  as  a  group  ?  That  is  what 
protection  comes  to  just  as  soon  as  we  have  drawn 
out  into  light  the  other  side,  the  cost  side  of  it. 
Whatever  we  win  on  one  side,  we  must  pay  for  by 
at  least  equal  cost  on  another.  The  losses  will  all 
be  distributed  as  net  pure  injury  to  the  community. 
The  harm  of  protection  lies  here.  It  is  not  meas- 
ured by  the- tax.  It  is  measured  by  the  total  crippling 
of  the  national  industry.  We  might  as  well  say  that 
it  would  be  a  good  thing  to  put  snags  in  the  rivers, 


WAR  AND  PROTECTION.  161 

to  fell  trees  across  the  roads,  to  dull  all  our  tools, 
as  to  say  that  unnecessary  taxation  could  work  a 
blessing.  Men  have  argued  that  to  destroy  ma- 
chines was  to  do  a  beneficial  thing,  and  I  have 
recently  read  an  article  in  a  Boston  paper, 
quoting  a  Massachusetts  man  who  thinks  that 
what  we  need  is  another  war  in  the  United  States. 
Such  men  may  believe  that  protective  taxes 
work  a  blessing,  but  to  those  who  will  see  the 
truth,  it  is  plain  that,  when  the  whole  effect  of 
the  protective  system  is  distributed,  it  benefits 
nobody.  It  is  a  dead  weight  and  loss  upon  every 
body,  and  those  who  think  that  they  win  by  it 
would  be  far  better  off  in  a  community  where 
no  such  system  existed,  but  where  each  man 
earned  what  he  could  and  kept  what  he  earned. 
152.  There  is  a  school  of  political  science  in 
this  country  in  whose  deed  of  foundation  it  is 
provided  that  the  professors  shall  teach  how  "by 
suitable  tariff  legislation,  a  nation  may  keep  its 
productive  industry  alive,  cheapen  the  cost  of 
commodities,  and  oblige  foreigners  to  sell  to  it  at 
low  prices,  while  contributing  largely  toward  de- 
fraying the  expenses  of  the  government."*  Is  not 

*  Quoted  by  Taussig  :     History  of  the  Existing  Tariff,  73. 


162  PROTECTIONISM. 

that  a  fine  thing?  Those  professors  ought  to 
likewise  provide  us  a  panacea,  the  philosopher's 
stone,  a  formula  for  squaring  the  circle,  and  all 
the  other  desiderata  of  universal  happiness.  It 
would  be  only  a  trifle  for  them.  The  only  fear  is 
that  they  may  write  the  secret  which  they  are  to 
teach  in  books,  and  that  other  nations  to  whom 
we  are  "  foreigners,"  may  learn  it.  Then  while 
Englishmen,  Frenchmen,  and  Germans  work  for 
us  at  low  prices  and  pay  our  taxes,  we  shall  be 
forced  to  work  for  them  at  low  prices  and  pay 
their  taxes,  and  the  old  somber  misery  will  settle 
down  upon  the  world  again  the  same  as  ever. 

153.  Some  years  ago  we  were  told  that  protec- 
tion was  necessary  because  we  had  a  big  debt  to 
pay.  Well,  we  have  paid  the  debt  until  we  have 
reduced  it  from  $78.25  per  head  to  $28.41  per 
head.  We,  the  people,  have  also  raised  our 
credit  until  the  annual  debt  charge  has  been 
reduced  from  $4.29  per  head  to  95  cents  per  head. 
Now  it  is  necessary  to  keep  up  the  debt  in  order 
to  keep  up  the  taxes,  and  protectionism  is  now 
most  efficient  in  forcing  wasteful  and  corrupting 
expenditures  to  get  rid  of  revenue,  lest  a  surplus 
should  furnish  an  argument  for  reducing  taxation. 


THE  BLAME  FOR  HARD  TIMES.  163 

This  is   right  on  the  doctrine  that  waste  makes 
wealth. 

154.  They  tell  us  that  protection  has  produced 
prosperity,  and  when  we  ask  them  to  account  for 
hard  times  in  spite  of  the  tariff,  they  say  that 
hard  times  are  caused  by  the  free  traders  who  will 
not  keep  still.  Therefore  the  prosperity  produced 
by  protection  is  so  precarious  that  it  can  be  over- 
thrown by  only  talking  about  free  trade.  They 
denounce  laissez  faire,  or  "let  alone,"  but  the 
only  question  is  when  to  let  alone,  when  to  keep 
still.  They  do  not  let  the  tariff  alone  if  they 
want  to  revise  it  to  suit  them,  or  want  to  make  it 
"equitable."  When  they  get  it  "  equitable  "  they 
will  let  it  alone,  but  that  insures  agitation,  and 
makes  sure  that  they  will  cause  it,  for  an  indefinite 
time  to  come.  On  the  other  hand  the  victims  of 
the  tariff  will  not  keep  still.  Their  time  to  "  let 
alone  "  is  when  it  is  repealed.  If  the  tariff  did 
not  hurt  somebody  somewhere  it  would  not 
do  any  good  to  any  body  any  where,  and  the 
victims  will  resist.*  Mr.  Lincoln  used  to  tell  a 


*  Illustrations  of  this  are  presented  without  number.  Here  is 
the  most  recent  one  :  "  The  [silk]  masters  [of  Lyons,  France], 
look  to  the  government  for  relief  by  a  reduction  of  the  duty  on 
cotton  yarn,  or  the  right  to  import  all  numbers  duty  free  for  ex- 


1 64  PROTECTIONISM. 

story  about  hearing  a  noise  in  the  next  room. 
He  looked  in  and  found  Bob  and  Tad  scuf- 
fling. "What  is  the  matter,  boys?"  said 
he.  "It  is  Tad,"  replied  Bob,  "who  is  try- 
ing to  get  my  knife."  "  Oh,  let  him  have  it, 
Bob,"  said  Mr.  Lincoln,  "just  to  keep  him  quiet." 
"  No  !  "  said  Bob,  "  it  is  my  knife  and  I  need  it  to 
keep  me  quiet."  Mr.  Lincoln  used  the  story  to 
prove  that  there  is  no  foundation  for  peace  save 
truth  and  justice.  Now,  in  this  case,  the  man 
whose  earnings  are  being  taken  from  him  needs 
them  to  keep  him  quiet.  Our  fathers  fought  for 
free  soil,  and  if  we  are  worthy  to  be  their  sons  we 
shall  fight  for  free  trade,  which  is  the  necessary 
complement  of  free  soil.  If  a  man  goes  to 
Kansas  to-day  and  raises  corn  on  "  free  soil,"  how 
does  he  get  the  good  of  it,  unless  he  can 
exchange  that  corn  for  any  product  of  the  earth 
that  he  chooses  on  the  best  terms  that  the  arts 
and  commerce  of  to-day  can  give  him  ? 

port  after  manufacture.  With  the  present  tariffs,  they  maintained, 
which  is  no  doubt  true,  that  they  cannot  compete  with  the  Swiss 
and  German  makers.  But  the  Rouen  cotton  spinners  oppose  the 
demand  of  the  Lyons  silk  manufacturers,  and  protest  that  they 
will  be  ruined  if  the  latter  are  allowed  to  procure  their  material 
from  abroad.  The  Lyons  weavers  assert  that  they  are  being 
ruined  because  they  cannot." — (Economist,  1885,  p.  815.)  The 
cotton  men  won  in  the  Chamber  of  Deputies,  July  23,  1885. 


LIBERTY  AND  TAXATION.  165 

155.  The  history  of  civil  liberty  is  made  up  of 
campaigns  against  abuses  of  taxation.  Pro- 
tectionism is  the  great  modern  abuse  of  taxation ; 
the  abuse  of  taxation  which  is  adapted  to  a 
republican  form  of  government.  Protectionism  is 
now  corrupting  our  political  institutions  jitst  as 
slavery  used  to  do,  viz.,  it  allies  itself  with  every 
other  abuse  which  comes  up.  Most  recently  it 
has  allied  itself  with  the  silver  coinage,  and  it  is 
now  responsible,  in  a  great  measure,  for  that 
calamity.  The  silver  coinage  law  would  have 
been  repealed  three  years  ago,  if  the  silver  mining 
interest  had  not  served  notice  on  the  protection- 
ists that  that  was  their  share  of  protection, 
and  the  price  of  their  cooperation.  The  silver 
coinage  is  the  chief  cause  of  the  "  hard 
times "  of  the  last  two  or  three  years.  In 
a  well  ordered  state  it  is  the  function  of 
government  to  repress  every  selfish  interest 
which  arises  and  endeavors x  to  encroach  upon 
the  rights  of  others.  The  state  thus  main- 
tains justice.  (Under  protectionism  the  govern- 
ment gives  a  license  to  certain  interests  to  go  out 
and  encroach  on  others.  It  is  an  iniquity  as  to  the 
victims  of  it,  a  delusion  as  to  its  supposed  bene- 


1 66  PROTECTIONISM. 

ficiaries,  and  a  waste  of  the  public  wealth.  There 
is  only  one  reasonable  question  now  to  be  raised 
about  it,  and  that  is,  How  can  we  most  easily  get 
rid  of  it  ? 


THE  ENDo 


INDEX. 


The  numbers   refer  to  the  paragraphs. 


Abolition,  8 

Act,  the  tariff,  of  1883,  24 

Africa,  92 

Agitation,  154 

Agriculture,  101 

Alabama,  71 

Alchemist,  3,  n 

Alchemy,  9 

Algeria,  78 

Alphabet,  69 

American,  18,  32 

American,  the  Philadelphia,  12 

Art  of  national  prosperity,  I,  5, 

7,  148   , 

Art  of  political  economy,  141 
Art  of  production,  145 
Arts,  56,  75,  120 
Artisans,  75,  94,  1 21 
Assumptions,   3,  9,  21,  31,  32, 

147 

Astrology,  9 
Atlantic,  74 
Atlantic  States,  66 
Army,  145 
Australia,  71,  92,  116 

Balance  of  trad£,  2 
Bastiat,  137 
Bateman,  53 
Belgium,  53 
Berlin,  79 
Biscuit,  8 1 
Bismarck,  77 
Bonaparte,  Napoleon,  85 
Book-keepers,  102 


Boot-man,  48,  49 
Boot-straps,  47,  151 
Bounties,  2,  79,  80,  81,  84 
Bradstreefs,  26,  79 
Bread,  75 
Brewing,  81 
Bridgetown,  83 
Broderick,  G.  C.,   53 
Burden,  29,  101 
Bureau  of  Agriculture,  117 

Cables,  ocean,  75 

Cairnes,  J.  E.,  140 

Calamities,  26,  46 

California,   116 

Cameron,  Sen.,  83 

Cambridge,  141 

Campaign,  political,  26,  58,  132 

,    anti-corn-law,  150 

against  taxation,  155 


Canada,  71,  129 

Canal,  86,  88 

Capital,  10,  12,  13,  21,  35,  38- 

40,  43,  57,  91.  97,  133,  148 
Cattle,  37 
Caoutchouc,  67 
Census,  52,  57,  103 
Century,    eighteenth,  I 

,  nineteenth,  6 

Character,  national,  53 
Charles  II. ,  33 
Chastisement,  137 
Chili,  89 

China,  67,  69,  127 
Church,  8,  39,  40 


i68 


INDEX. 


Circle,  squaring  the,  152 

City-landlord,  75 

Civil  liberty,  155 

Civilization,  69,  70,  127 

Class,  non-capitalist,  2 

Clay,  37 

Climate,  37,  53 

Cloth,  42,  51 

Cloth-man,  48,  49 

Coal,  32,  33,  53,  71,  116,  123 

Coal-owner,  33 

Cobden,  91 

Coercion,  38 

Coin,  69 

Colonies,  77 

Combinaticns,  139 

Comfort,  see  Standard  of 

Commerce,  85,  89,  101 

Commission,  tariff,  24,  81,  130 

,  South   American,  89 

Committee,  Congressional,  15, 
103 

,  of  Conference,  24 

Compass,  69 

Competition,     100,     107,     121, 

132,  137 

Confectionery,  8 1 
Congo,   86 
Congress,  15,  21,  23-26,33,47, 

58,  83,  89,  129,  133 
Connecticut,  38,  94,  118 
Consuls,   104 
Consumer,  14,  32,  33,  in,  140, 

145 

Consuming  industries,  41 
Consumption  of  sugar,  79 
Contrivance,  3.  141 
Convention,  wool-growers',  32 

,     Home  Industry,  74 

Copper,  33,  45,  123 
Corn-laws,  lot 
Cosmopolitanism,  86 
Cotton,  37,  51,    71,  116,    134 

,  yarn,  154 

Cottons,  32 


Credit,  153 
Cuba,  67,  83 

Cunningham,  114,  134,  140 
Custom-houses,  12 

Debate,  89 

Debt,  153 

Decisions,  tariff,  27 

Definition,  14,  148 

of  an  industry,  36 

of    a    protective  tax, 

12,  13 
of  free  trade,  8,  12 


of  protectionism, 
of  theory,  7 


Demand,  91 
Democracy,  92 
Demoralization,  139 
Device,   I,  2,  6,    7,  14,  19,  2O, 

83,  96,  106 

Diplomacy,  86,  87,  88,  89 
Discipline,   137 
Disease,  industrial,  133 
Distilling,  81 
Distress,  21 

Diversification,  116,  125 
Dividend,  119,   123 
Dogma,  I,  5,  n,  26 
Dollars,  38,  60 
Drawback,  79,  83 
Duties,  import,  12,  24 

Economist,  80,  81,  84,  146,  154 
Economists,  historical,  140 
Education,  93 
Emancipation,  8 
Emery,  33,  45 
Emigration,  2,  6,  65,  77 
Employer,  48,  49,   50,   65,  95, 

98,  104 

Employment,  35 
Energy,  conservation  of,  1 6 
Engineers,  105 
England,  12,  53.67,  71.  74.  79. 

83.  8$,  99,  101,  105,  134,  196 


INDEX. 


169 


Europe,  96,  105 
Excise,  12,  79 
Expenditure,  30,  153 
Experiment,  26 
Exports,   122,  134 

,  bounties  on,  2 

,  taxes  on,  6 

Factory,  39,  41 

Earm,  Farming,  44,  53,  95 

Favors,  special,  by    treaty,  89 

Fire,  52,  73 

Fire-engine,  73 

Foreigners,    14,    15,     83,    141, 

144,  146,  152 
Fortifications,  145 
France,  53,  67,  75,  78,  134 
Free  soil,  8,  154 
Free  trade,  7,  8,  10,  12,  21,  52, 

54,  114,  123,  130,  131,  154 

Gambling-houses,  139 
Germany,  53,   74,  77,    79,   80, 

105,  134 

Glacial  epoch,  68 
Gold,  116 

Government,  good,  29,  31 
Grant,  Gen'l,  33 
Grasshoppers,  44 
Greeley,  Horace,  117 
Gunpowder,  69 

Hamilton,  Alex.,  109 
Hancock,  26 
Harbors,  53 

Hard  times,  26,  153,  155 
Hat-man,  48,  49 
Hides,  71 
History,  5 
Hod-carriers,  96 
Honduras,  67 
Honesty,  value  of,  131 
Humanitarianism,  86 
Hydrocephalus,  loo. 


Ideals,  I,  3,  58 

Illinois,  71 

Immigrants,    Immigration,  60, 

105,  121,  122 
Imports,  2,  6,  14 
Impracticability  of  protection, 

130 

Improvements,  90,  133 
Industry,    14,    34-43,    79,    82, 

123,  125 

Independence,  national,  127 
India,  18 
Infants,  109,   in 
Insane-asylum,  39 
Insurance,   107 
Interest,  rate  of,  66 
Inter-Ocean ,   71,  95 
Investigation,  sugar,  81 
Iowa,  95 
Ireland,  18,  60 
Irishman,  60 
Iron,   32,  44,  46,  71,  103,  107, 

123,  125 

Iron  Association,  95 
-Ism,  xo 

Jam,  81 

fcpan,  69,  73,  127 

Jefferson,  71 

Journal des  Economistesrf^  no 

Kansas,  154 

Labor,  Laborer,  10,  13,  21,  38, 
51,  57     65,    71,    90, 
9!-98    133 
,  pauper,  44,  47,   51,  75, 

99,  148 

Laissez-faire,  5,  154 
Land,  53,    57,  91,   92-98,  117, 

118 

Latitude,  64 
Law,  13,  94 
Laws,    criminal,  2 
,  navigation,  2 


INDEX. 


Laws,  poor,  2 

Leather,  37 

Legislation,  II,  12,  24,  152 

Legislator,  n,  54,  75 

Lehigh  Valley,  33 

Liberty,  5,  8 

Library,  30 

Lincoln,  154 

London,  74 

Longitude,  64 

' '  Lords  of  Industry,"  139 

Louisiana,  83 

Lowell,  71 

Lumber.  71 

Lyons,  154 

Machinery,  2,  6,  90,  104 

Magic,  15,  149,  151 

Mahogany,  67 

Maine,  71 

Manchester,  71 

Manitoba,  71 

Manufactures,    IOI,    114,   115, 

117,  118 

Margin  of  cultivation,  120 
Marine  engines,  75 
Market,  the  home,  18,  83,  86 

1  the  world's,  18,  116 

; — ,  the  foreign,  83 

,  the  labor,  92 

Massachusetts,  71 

Bay,  94 

Materials,  raw,  2,  83 

Mexico,  71 

Mill,  John  Stuart,  no,  140 

Mineral  waters,  8 1 

Mining,  44 

Minnesota.  71 

Miseducation,  139 

Missionaries,  89 

Mississippi  Valley,  66,  71,   137 

Missouri,  71 

Monopoly,  2,  74.  m,"3.  121, 

128,  129,  139,  145,  J46 
Money,  112,  140 


Monkeys,  150 
Morals,  136 
Mumbo  Jumbo,  15 

Nation,   I 

,  an  inferior,  67 

,  a  strong,  116,  134 

Nationalism,  71 

Navigation  laws,   2 

Navy,  2,  15,  86,  87,  88,  145 

New  Brunswick,  71 

New  England,  32,  114 

New  Orleans,  71 

New  York,  74,  96 

New  Zealand,  84 

Newspapers,  7 

Nickel,  33,  45,  129 

Non-government,  4 

North  America,  71 

North  American  Review,  139 

Nova  Scotia,  71 

Nuisance,  42 

Ohio,  32 
Oil,  116 
Ore,  37,  53  . 
Overproduction,  III 

Panacea,  152, 

Paper-money,  2O 

Parasite,  39 

Paris,  75 

Parks,  30 

Passport,  8,  122 

Paterson,  71 

Paupers,  140 

Peasant-proprietor,  53 

Pennsylvania,  32,  44 

Pensioners,  140 

Perpetual  motion,  1 1 

Physician,  21 

Pigeons,  150 

Plunder,  17 

Policy,  vigorous  foreign,  86,  87 


INDEX. 


171 


Political    economy,   8,    10,    II, 

140 

Poor-houses,  99 
Population,  53,  54,  77,  92,  117, 

118,  123 
Pork,  77 
Porter,  R.  P.,  21 
Post,  N.  Y.  Evening,  78 
Potatoes,  71 
Prices,  2,  in,  112,   140 
Primitive  men,  68 
Princes,  140 
Prison,  39 

Producer,  14,  140,  145 
Product,  mode  of  alienating,  17 
Production,  10,  95 

,  cost  of,  83 

Profit,  22,  107 
Proletariat,  92 
Prosperity,  national,  I,  6,  7,  9, 

10,  n,  15,  21,  24,  25,  31,32, 

33,  52,    53,  54,  61,  102,  115, 

148,  153 
Purchasing  power,  60 

Railroad,  119 

Razor,  67 

Refiners  and  refining  of  sugar, 
80,  81,  82 

Reformation,  the  Protestant,    8 

Rent,  120 

Reporter,  Barbados  Agricul- 
tural, 83 

Resource,  natural,  44,  45,  46 

Revenue,  12,  14,  153 

Richmond,  Duke  of,  33 

Robbery,  17 

Sandwich  Islands,  84 
Santa  Maria,  89 
Savings,  30 
School,  II,  39,  40 

of  political  science,  152 

Seminary,  theological,  89 


Sheffield,  71 

Ships,  75,  89 

Ship-building,  2,  69,  86,  87,  88 

Sidgwick,  Prof.,  141,  142 

Silk,  37,  67,  142,   145,  154 

Silver  coinage,  155 

Sinecurists,  140 

Sisyphus,    137 

Skating-rinks,  139 

Slavery,  8,  55,  155 

Smoke  nuisance,  139 

*'  Snakes,"  n 

Socialism,  106 

Social  science,  20 

Society,  human,  I,  3 

Sociology,  5,  6 

Soothsaying,  9 

South  America,  67,  71 

Soudan, 150 

Spain,  83 

Specie,  importation  of, 

St.  Gothard,  74 

St.  Louis,  32 

Standard  of   comfort,    30,    52, 

59,  60,  61,  101,  148 
Standard  of  gain,  89 
State,  3,  4,  5,  8,  106,   107,  no 
State  in  the  Union,  71 
Statesmanship,  5,  n,  76 
Statesman,  I,  5,  38,  44,  75,  85, 

86 

Statistics,  52,  102,  117 
Steel,  103,  124 
Stewart,  A.  T.,  134 
Stone,  the  philosopher's,  9,  15, 

152 

Struggle  for  existence,  106 
Subsidies,  75 
Suburbs,  75 
Sugar,  67,  79-85 
Superstition,  133 
Surplus  revenue,  153 
System,  colonial,  2,  78 

,  credit,  133 

,  protective,  27,  32,  48 


172 


INDEX. 


System,  wages,  92 
Swindlers,  140 

Tariff,  15,  18,  48,  83,  96,  97, 
105,  116,  122 

Taussig,  F.  W.,  24,  152 

Tax,  14,  15,  17 

Taxation,  29,  75,  151,  155 

Tax-gatherer,  59 

Taxes,  I,  n,  29,  31,  48,  75, 
87,  98,  101,  133 

,  on  exports,  2,  6 

,  on  imports,  2,  6,  12 

,  protective,  7,  9,  10,  12, 

13.  T4,  35.  47,  48.  61,  in, 
112,  118,  120,  135,  137,146, 

151 

Tax-payers,  140 

Tea,  67 

Telephone,  37 

Texas,  71 

Theorist,  7 

Theory,  7,  8,  9,  10,  130 

Thread,  129 

Times  t  N.  Y.,  32,  89 

Tin,  45 

Trade,  63-72,  125,  128,  134 

Trades,  the  building,  96 

Trade,  carrying,  2,  86,  87,  88 

Trains,  122 

Transportation,  74,  75,  91 

Treasury,  14,  27,  71 

Treaty,  commercial,  83-89 

Trial  and  failure,  9,  n 

Tribune,  N.  Y.,  117 

Tribute,   17,  32,  118,  146,  149, 

151 

Turkey,  18 
Turn-pike,  74 


Tyne,  33 
Types,  69 

United  States,  8,  52,  67,  71, 
75,  89,  101,  105,  114,  123, 
129,  133,  151 

Units,  71 

Vegetables,  37 

Victims  of  the  tariff,  10,  155 

of  fraud,  140 

Wages,   2,    26,  35,   47,  48,  49 

65,  91-105,   122 

Wages-class,  48,  49,  92,  93 
War,    87,  89,  132,  151 

,  commercial,  132 

Washington,    city   of,    22,   44, 

47,  89 
Waste,  31,  43,  46,  62,  148,  153, 

155 

Wealth  (see  Prosperity),  43 
Weights  and  measures,  69 
Westminster  Review ',  150 
Wheat,  44,  51,  7*.  75,  77,  "6, 

125,  134 
Winthrop,  94 
Wishes,  good,  59 
West  Virginia,  45 
Wool,  32,  37,  69,  71,  123 
Wool  growers,  32 
Woolen-mill,  42 
Woolen-operative,  51 
Work,  35,  71,  125,  137 
Working-man,  47 
Work-shops,  public,  107,  126 
Wright,  Carroll,  104 


foung  country,   no,  134 


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